Cryptocurrency payments accounts exist solely as digital records in an online database describing specific transactions, rather than being physical money transported and exchanged in the real world.
What Is A Crypto Account?
Accounts are the records in an accounting system used to keep track of the financial operations of a specific asset, cost, income, equity, or liability. When compiling financial statements, each account is inputted into a general ledger, where it may be retrieved at any time. In other terms, accounts are records or reports of financial expenditures and revenues for a certain period or purpose.
In the crypto domain, this is known as a cryptocurrency account. A cryptocurrency account offers users access to hot wallets for fast purchasing, selling, and trading digital assets.
All exchanges and crypto service providers, for example, require users to create an account and associate themselves with them for security and privacy reasons. Through a crypto account, a user can quickly identify themselves and have control of their crypto assets at any point in time.
The flexibility in crypto accounting is that there is room for customization depending on the needs of the service provider, like a wallet issuer or account owner. You may also use your account to obtain special offers from the platform or exchange you choose to engage in. These can range from a person’s personal preferences to their financial constraints. A cryptocurrency account, in its most basic sense, serves as a command center.
As discussed above, a cryptocurrency account offers several advantages, all of which can be condensed as follows:
Ease of Use:
It’s easy, quick, and anonymous to use a crypto account for the first time. Even an email address isn’t necessary. You only need to set up a password and remember (and store) the secret recovery phrase.
Your information is protected by secure encryption that no one else can access in your browser. If you forget your password, the 12-word secret recovery phase, sometimes referred to as a seed phrase, might help you recover it. Notably, it is vital to safeguard the seed (recovery) phrase since it is custodial and the user also has access. Using a private key, a user can claim lost assets or wallets at any time.
How to Set Up Your Crypto Account:
- Install a wallet app. Popular ones include Coinbase Wallet and MetaMask.
- Register for an account. To establish a non-custodial wallet, you do not need to provide any personal information. Even an email address is omitted.
- Remember to save your private key supplied as 12-word (can vary) seed (recovery) phrase. Please place it in a safe place. If you forget or lose these phrases, you cannot access your cryptocurrency account and will lose all assets.
- Transfer cryptocurrency to a wallet. It is not always feasible to purchase cryptocurrency using conventional currencies (such as US dollars or Euros) using a non-custodial wallet. Thus, you will need to move cryptocurrency into your crypto account in a centralized exchange (CEX) like Binance or Coinbase before proceeding.