HOW TO MAKE A CRYPTOCURRENCY PAYMENT

1. Log onto a cryptocurrency exchange or direct deposit platform.

2. Open a cryptocurrency account.

3. Transfer money from a bank account to an online wallet, which functions like a bank account.

4. Each unit of cryptocurrency you own is protected by its own personal identity code. When you buy a unit, it comes with a secret code (private key) generated for each address at which you hold the currency. A private key is similar to a PIN from a bank and allows you to transfer your cryptocurrency from one account to another.

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5. When you buy something at a shop that accepts cryptocurrencies, you access your cryptocurrency wallet on your smartphone.

You use your phone to scan the code shown on the bill, approve the transaction on your phone, wait for the network to approve the transaction, and use your private key to authorise a transfer to the seller’s wallet.

The transaction is processed by a network of miners’ computers that verify the (encrypted) transaction. It is then included in a ‘block’ with transactions of the past 10 minutes.

Anyone can see your transaction and cryptocurrency address, but not your private key, balance or personal data.

SECURITY Cryptocurrency transactions are probably more secure than credit-card transactions, but your wallet and private data are stored on your computer. It is still your responsibility to keep it secure.

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