Your Ultimate Guide about the Crypto Space.
Below is an educational guide across the crypto space with insights about the latest updates on Exchanges and Wallets, including what are NFT’s and DeFi solutions.
What is Cryptocurrency?
Being a complete beginner to cryptocurrency can be frustrating. Sometimes it’s hard to grasp the simple concepts and even basic meaning of terms. Since Satoshi Nakamoto invented the first cryptocurrency (Bitcoin) in 2008, many things haven’t remained the same.
Although lots of people discuss cryptocurrency daily, many do not understand how it works. If we’re going to explain cryptocurrency, we have to look at how humans exchanged goods and services way before digital currencies existed. The human transaction system has been in place for centuries but has evolved over the years from the simple trade by barter, which died out quickly for obvious reasons, to modern paper and coin currency, credit cards, digital wallets, and e-payments.
All these modern payments have a centralized body (usually the banks and other federal regulatory agencies) that regulate how they work. This centralized system has a few glitches, such as failed or late transactions, limited daily transfers, and so on. To overcome these shortcomings, the future of currency was invented- cryptocurrency.
Cryptocurrency is a digital medium of exchange. While blockchain takes over the role of the centralized body, each coin has its blockchain, and some new coins are built on old ones. The word “crypto,” which is short for cryptography (using encryption and decryption to send information), means to keep information safe and free from hackers.
Blockchain is a shared database. This connotes that, unlike the bank with all your credit card information and billing data stored in a single location, blockchain is managed by many different people and companies. There’s a limit to the amount or unit of cryptocurrency that can be produced. As such, it can get scarce and become greatly demanded, which would impact its price positively.
Types of Cryptocurrencies
Since the first coin was mined 12 years ago and its blockchain created with it, there’s been a significant increase in the digital currency pool. Now, coins are being produced almost every day. The most popular crypto coins include:
What is Bitcoin?
Bitcoin is a digital currency that you can exchange over a computer or phone anywhere in the world as long as you have an internet connection. This feature it has is regarded as peer-to-peer networking. Bitcoin is written in a vague touring language, which means it can only understand a few sets of instructions like who sends and who receives it thereby, making it a safe medium for transactions.
Buy Bitcoin
Buying Bitcoin is simple even for beginners; you can follow these three safe steps.
Step 1: You get a Bitcoin Wallet.
Step 2: Find a Bitcoin address. This is a long stream of numbers and letters that usually start with a ‘1’ or a ‘3.’ Storing your bitcoins on an app can be risky, but having your wallet with a personalized address will give you full control of your Bitcoin and its keys.
Step 3: Buy Bitcoin on an online exchange. This can be a trading platform or a broker.
Who Accepts Bitcoin?
Bitcoin is an asset that everyone wants to get their hands on. As more companies, stores, and even banks are getting on board and accepting digital coins; you can rest assured that you won’t have a problem spending your digital currency anywhere.
Bitcoin ATM
Bitcoin ATMs are like everyday ATMs. The only twist is that they only allow transactions involving cryptocurrency; you can either buy cryptocurrencies with your card or cash, and some bi-functional Bitcoin ATMs also have the option of selling your Bitcoin and getting paid.
Bitcoin Calculator
Bitcoin calculators are used to calculating and converting Bitcoin’s relative price to a particular currency or other digital coins. Several apps exist specifically for this purpose, and some crypto exchanges have this feature built-in.
Bitcoin Halving | Mining
Bitcoin halving is used to determine the amount of Bitcoin in circulation at a particular time. It is a long-term process of reducing the amount of BTC given away to miners. The total amount of Bitcoin that can be mined is 21 million, and halving ensures the rate Bitcoin is released predictable and spans over many years. This makes it reliable, scare, and concurrently increases its value.
Just like how paper money is printed, Bitcoin is mined before it can be released into circulation. The only difference is, regulated bodies like banks are the only ones with authority to print out money. But Bitcoin can be mined by pretty much anyone. It is noteworthy that mining isn’t an easy task as it requires a lot of electricity, time, and mathematical skills.
Bitcoin Price History
In the early days, when Bitcoin was created, it had little to no value. Miners were given almost 50BTC for each math problem they turned in, which was equivalent to about 50 cents. As more people continued mining and after the first halving took place, miners were given 25BTC for each math problem, and the price of BTC rose from $2 to $270 in 2012. The value of Bitcoin kept increasing, and around 2018, the monetary value of BTC saw a huge increment.
Today the price of Bitcoin is well over $30,000.
Ethereum is the second-largest cryptocurrency after Bitcoin was launched in 2015. It is an open-source blockchain-based decentralized software; anyone can work on it and improve its functionality without directly affecting its source code. Consequently, Ethereum has a lot more to offer apart from trading its coin- Ether.
Litecoin is a coin that was created in 2011, a couple of years after bitcoin by an ex-engineer at google rated by capitalization, Litecoin is the twelfth-biggest cryptocurrency.
Dogecoin is a coin devised by Billy Markus and Jackson Palmer, who wanted to set up a payment system as a joke. Dogecoin features the face of a dog as a logo. It launched in 2013 and got quite popular.
What are ALT coins?
ALT coins, as their name implies, mean alternative coins. They are any cryptocurrency that isn’t Bitcoin. This implies Ethereum and Litecoin are both altcoins, including coin like Cardano, Polkadot, Chainlink, Polkamarkets and so much!
What are NFTs?
NFTs are tokens stored on a secure digital database that have different values. NFT stands for Non-Fungible Token. The word fungible means that you can exchange one asset for the other because they hold the same value. Currently there are multiple sites that you can buy various NFT’s, though the most popular are Rarible, Nifty Gateway and OpenSea.
What is DeFi?
DeFi stands for decentralized finance. It is a broad name essentially used to describe basic financial tools used in the blockchain ecosystem. It works using blockchain to transform old financial products into secure protocols that run without a middle man.
DeFi on Binance smart chain
Binance smart chain offers several DeFi options, they all provide financial services through contracts, and it’s a simple way to buy DeFi cryptocurrencies.
Buy Crypto
Today, you can buy cryptocurrencies from pretty much everywhere. You just have to be sure it’s from a reputable source. As long as you have your cash or credit card and a secure internet connection, you’re good to go. You can buy cryptocurrencies from the following:
Cryptocurrency Brokers
Crypto | Bitcoin ATM’s
Crypto | Bitcoin ATM’s
Crypto Exchanges
Crypto exchanges allow you to buy and sell cryptocurrencies. They are usually large businesses or companies that allow individuals to trade crypto assets and charge a particular amount for transactions.
Binance is fast becoming one of the world’s leading cryptocurrency exchanges. Binance has basic and advanced trading options like futures and margins. This makes this exchange easy for both beginners and experts. Binance has two platforms nowadays, Binance.com and Binance.us
Coinbase is supported in over 132 countries and is the most widely used crypto exchange in the USA. Coinbase allows you to buy and sell Bitcoin as well as over 21 other coins. Its transactions are fast and secure, and they have one of the lowest gas fees in the market.
Coinbase has its downsides as users don’t have direct access to the funds in coinbase or the private keys controlling them.
Crypto.com is another safe and popular exchange app that urges users to buy and sell crypto.
Bybit is available in most countries. However, US citizens are not allowed on the exchange. It allows you to trade futures and gives you leverage of up to 100. It is a cryptocurrency exchange derivative that is suitable for more experienced traders. They have great customer care support.
Crypto Wallets
Your crypto wallet is where your cryptocurrencies are stored. Unlike your ordinary wallet, where you keep your money and get it, crypto wallets are relatively safe. For each coin you want to buy, you have to open a separate wallet and have its address attached to it.
If you’re planning to buy a small amount of digital currency and you need somewhere free to store it, then software wallets are your best pick. Software wallets run on your laptop or phone they’re good for beginners.
Hardware crypto wallets are small digital devices you connect to your computer to store and receive crypto. Hardware crypto wallets are relatively safer for storing your digital currencies. They come at a fair price and are also good for storing larger amounts of coins.
It is a software crypto wallet where you can store Binance coin. It is carefully designed to keep your funds safe and is essentially a crypto wallet for Binance smart chain. It is available as an app and as a browser extension.
Metamask is an Ethereum-based wallet that promises to hide all its users’ information and data from third parties and keep their ethereum based coins and tokens safe and secure. It is available as a browser, extension, and mobile app.
How does Cryptocurrency work?
Cryptocurrencies are not attached to any country or organization that can regulate or control them. Cryptocurrencies are Digital currencies; they only exist electronically and are exchanged in worldwide peer-peer networking. Every transaction involving these currencies is recorded in a blockchain, like a ledger that keeps track of all the bitcoin and bitcoin transactions that have ever occurred to date.
For every transaction that occurs of a cryptocurrency, e.g., bitcoin, you have to announce three things to the Bitcoin network, namely:
- Your wallet address.
- How much you want to send.
- The wallet address of who you’re sending to.
All this information is registered into the blockchain/ledger, which is managed by different people worldwide. Bitcoin transactions stay safe because they use cryptography and keys, large amounts of information used to make mathematical guarantees like sending and receiving funds.
Cryptocurrency Market Cap
This can be used to calculate the monetary value of cryptocurrency. To calculate a coin’s value, you multiply the total amount of the coin in circulation (you can get this from Google) by the coin’s price.
Marketcap formula: Total circulating supply of coin × price of coin.
Large market cap assets have less room to grow than low market cap assets. This means you’ll gain more by investing in a small-cap asset, but you also stand to lose more.
Tokens VS Coin’s
Coins are anything used for payment on the blockchain, so that would involve bitcoins, ALTcoins and ethereum; they can exist and function independently.
Tokens, on the other hand, require other platforms to exist and operate. An example of this is “auger.” You can build tokens on platforms like NXT, ethereum, or Omni. Without these platforms, the tokens would cease to exist.
How to use Cryptocurrency?
Just like how you can do pretty much anything with money, you can do the same with cryptocurrency.
You can:
Hold it till it increases in value, then sell it off.
Buy things with it since almost everyone recognizes digital coins as a valid means of transaction.
Invest it and get ROI
Trade it and make a profit on the spot or lose all your coins. This depends on your trading skills.
Is it illegal to Trade Cryptocurrencies?
Unless you are obtaining your coins through illegitimate means or living in a country like Morocco and Algeria, where bans and heavy fines have been placed on crypto trading, then it’s safe to say that cryptocurrency trading is not illegal.
How to Protect yourself in Crypto?
With the rise in the value of most cryptocurrency assets, it’s no surprise that more people are trying to get their hands on it, especially scammers and hackers. To keep yourself and your crypto wallet safe, you should check the following off your list: