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You buy AMP the same way you buy lots of other coins: by going to a crypto exchange — either centralized or decentralized — or a crypto trading platform like Wealthsimple. We are the first crypto platform to be regulated in Canada, after all. You can also use peer-to-peer services, but know that that comes with increased risk.Buy and Sell Bitcoin, Ethereum, and over a dozen other cryptocurrencies with Wealthsimple. Sign up and Trade here.
What is AMP?
AMP is a token used to help make buying things with crypto far easier. How? One big issue with blockchain technology is that, on some networks, it can take several minutes, hours, or even days for transactions to go through — much longer than most of us are used to waiting when we buy with cash or a credit card. The longer that period is, the more likely it is that the value of the crypto you are trading will change.
This may not sound like a big deal for some trades, but if a retailer wants to let people pay for goods with crypto, they probably don’t want the price of those goods to fall in the time it takes to check out. They also don’t want you to have to hang around in the store for 10 minutes while you wait for your transaction to clear.
One solution to this problem is the Amp protocol, which uses its own token — AMP — to make those purchases less time-consuming. When you make a purchase, Amp’s payments network puts AMP up as collateral until the actual crypto you want to pay with makes it to the store’s account.
How AMP Works
Amp’s payment network is called Flexa, and it’s supported by thousands of stores in North America, like Lowe’s and Nordstrom. Say you want to use ETH to buy a nice sweater. (It’s cashmere, but it’s on sale, and you deserve it.) The Flexa app creates a barcode, which the salesperson scans to complete the transaction. Flexa immediately pays Nordstrom by deducting the ETH from your digital wallet in the app. To protect Nordstrom from incurring loss in case the transaction does not go through, staked AMP (the people who provide the staked funds receive a reward for doing so) is used as collateral. Once the official transaction clears, the collateral is promptly released. Nordstrom has its money — minus a 1% fee used to reward stakers — and you have your sweater, with no waiting required.
What Else You Can Do With AMP
As with many cryptocurrencies, you can simply buy and sell AMP as a form of speculation. But, of course, be careful. With the volatility of the crypto market, it’s hard to predict the token’s future value.
You can also stake AMP to be a part of the pool that the Flexa network uses as collateral. To earn crypto from staking, you’ll have to lock that AMP, meaning you won’t be able to sell or use it until you stop staking. But, for doing so, you’ll earn rewards — often in the form of more AMP.
AMP is also a governance token, meaning that you can use it to influence the future of the Amp protocol by voting on — or even suggesting — proposals for improvement.
Frequently Asked Questions
The only person who can decide whether AMP crypto is a good investment is you. To figure that out, you’ll want to think about how much risk you’re willing to take on as part of your investment portfolio. The AMP market can be, like all crypto, particularly volatile. So you should prepare not only for big gains, but also the potential for big losses.
Yes, you can cash out your AMP crypto by selling it on a crypto exchange or trading platform, or exchanging it in those venues for the equivalent value in fiat money. If it’s staked and you are earning rewards, your crypto is locked until you unstake it, which often involves a cooldown period.
AMP is a form of collateral token. It is used as collateral particularly by payments networks that want to make transactions with other forms of crypto happen far more quickly. When, for instance, a customer at a brick-and-mortar store wants to pay with a crypto coin, it can take a long time for that transaction to take place — minutes, hours, even days — which is far longer than the seconds that customers are used to waiting while using their credit card. But a payments network can put up the equivalent value in AMP as collateral while everyone is waiting for that other form of crypto to make it to the store’s account. This allows the customer to immediately go about their day, and it lets the store not worry about a crypto price swing happening while it waits for the other form of crypto to arrive. Once the payment finishes, the AMP collateral is returned to the payments network.
AMP is not a stablecoin. A stablecoin is a kind of crypto that has its value constantly pegged to the value of something else — say, a form of fiat currency, like the U.S. dollar or the euro, or a pool of another overcollateralized crypto. AMP’s value is not pegged to anything else.
There are over 99 billion AMP coins in total, though only a little over 42 billion of those tokens are currently circulating as of April 2022.
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