Tech

Beginner’s guide to cryptocurrency


 

Unless you’re living under a rock, everybody heard about Bitcoin for the past 2-3 months. The cryptocurrency that was once considered the “internet’s dark money” has hit mainstream in a big way once it got a valuation of over 19,000 USD per coin. Basically, everybody is talking about it and more people are entering the cryptocurrency space to invest and trying to catch the crypto trend. While Bitcoin was and still is the king of crypto, there are a lot more coins that hold value in the space and different types of blockchains. Also more and more projects appear into the space daily, some adding different types of currencies while others serve as a different platform for different real-world needs. Before we dive into the different coins, let’s cover some of the basics, shall we?

What is the blockchain?

The blockchain can be considered the internet’s decentralized ledger. It’s not ran by any corporation or private entity and it’s entirely powered by its users. Let’s see how the blockchain works: let’s say Andrea wants to send Judy 1 bitcoin. Using her digital wallet, she enters Judy’s wallet as the transaction destination and presses send. The transaction is sent into a block and awaits confirmation from the miners. Miners are similar to our daily accountants, they use specialized hardware and software to decrypt and confirm transactions. Once the transaction has been decrypted and confirmed by the miners, the block is sent to the chain, aka the blockchain. Once the transaction is embedded into the blockchain, Judy will receive her 1 bitcoin in her wallet. Simple right? While the technology at its core is way more complicated than this, it’s important for us to understand how the transactions work and why it’s important to understand that the blockchain technology will revolutionize our internet as we know it. Nobody will alter the transactions, nobody will tell you that you have to send or recieve an x amount and most importantly, we won’t have a bank that will impose their policy over our funds. Future sounds bright right? Well, we still have ways to go until cryptocurrency gets widely adopted but we’re onto the right track.

Other crypcocurrencies?

Looking only at the top 5 coins by their current market cap, we’ll find the following:

  1. Bitcoin
  2. Ethereum
  3. Ripple
  4. Bitcoin Cash
  5. Litecoin

As you can see, Bitcoin is not alone in its adventure and you may wonder, why isn’t Bitcoin enough? Well, each coins has its own pros and cons and not all coins are currencies only. Ethereum for example uses its blockchain to allow the development of applications. These may be other cryptocurrencies or applications that will do different things, for example, a vetting system. Imagine in 2025, instead of going physically to vote, you will vote from your computer, using the blockchain. The vote will be the most secure since no hackers or 3rd parties can alter it and everything will be decentralized, meaning if you delete a node or several others, you’re vote will still be recorded and counted. And that’s only one example, there are thousands more than can “upgrade” our lives.

How can I buy cryptocurrencies?

There are different places to buy your crypto from but no matter what you want to buy, you have to buy Bitcoin first since most other crypotocurrencies are only purchasable with Bitcoin. There are several exceptions such as Ethereum and Litecoin but since you’ll be new to the space, we strongly recommend to start by getting your first Bitcoin. We found a really useful guide on where to buy Bitcoin from, and as you’ll see, you have a lot of choices, depending on your preference, country and needs.

Keep in mind, while crypto can be vert appealing and “trendy”, it’s a VERY volatile market, prices go up and down weekly and trends shift by the second. Don’t invest more than you can afford to lose, that’s what we’re saying here.


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