Hello and welcome to this simplified guide to Cryptocurrency. The main focus for this guide will be introducing people to the world of digital assets and answer frequently asked questions. Hopefully by the end of this guide you will have a better understanding of the workings of the crypto world.
DISCLAIMER: Before you read any further I will like to point out that I am in no way a expert on cryptocurrency and nor do I claim to be one. I have traded crypto and made money doing it. This guide is to help you better understand the world of online assets. That being said always do your research before making any decisions.
Okay! Are you ready? Grab your pencils kids and start taking notes!
WHAT IS CRYPTOCURRENCY?
The main and frankly the first question asked when starting anything is what is it?
To put it lightly cryptocurrency is basically online money that is not regulated by any government. Which means that it is not central to just one country or region but available all over the world. An even simpler explanation is that it is like monopoly money with real-life value. The reason why it is very popular is because it offers quick and secure ways of exchanging money for services, goods, trading and other things.
For example:
Lets assume you need to send some money overseas or make business payments to international partners. Traditionally you would have had to go the bank and make transfers while paying heavy fees and waiting multiple business days for your payment to clear. That's where crypto comes into play you could make payments right into the receivers wallet while chowing down on pizza and watching your favorite shows.
This also enables business to cut down on processing times and fees thus insuring smooth and fast delivery which in turn increases business.
IS IT SECURE?
Another frequently asked question is using crypto secure? How would I know if my money is going to be safe and what if someone make false transactions?
Using cryptocurreny networks is extremely safe and secure. Most networks use a peer-to peer or person-to-person network to verify new transactions. New transactions are held in a queue as they are received and verified by users. Each transaction that is verified is encrypted and added to a public leader that is accessible by everyone. The details are stored in a random string of numbers and letters that only the system can read thus making it impossible for anyone to know the origin or destination of the transaction. These transactions are irreversible so be careful while sending any coins because once they are gone they ain't coming back!
I know! I Know! I said it was gonna be a simple guide and I just wrote a bunch of mumbo jumbo. Well hold your horses I'll explain.
Okay. Here we go. A peer-to-peer network is basically a network run by members. In the cryptocurrency world this plays a big role since everyone who owns any form of cryptocurrency has a copy of the public ledger. This means that every person on the network has a record of every single transaction ever made on that network.
Here is an easy way of looking at it suppose 10 friends decide to make their own money system. They come up with a coin of their own and start exchanging it. They also make a special code which they use to confirm a transaction. Now to counter fraud or misunderstandings they got together every night and each record the days exchanges in their own personal ledgers. Everyone checks each others ledgers to make sure no errors were made. This is basically what happens with crypto ledgers but on a much larger and very efficient scale.
SOME POPULAR CRYPTOCURRENCIES
By now you would have some idea about what cryptocurrency is and how it works. Here are some popular cryptocurrencies.
1.BITCOIN
The most popular and instantly recognizable of all the cryptocurrencies considered the gold standard and ruling king of crypto at the moment. . Bitcoin was created by Satoshi Nakamoto a Japanese developer who's identity is surprisingly unknown. He was the first to mine bitcoin and is credited with making the bitcoin block chain technology. Bitcoin uses blockchain technology which is a public ledger that record all the transactions that happen on the network. It is maintained by a series of nodes that are run through the bitcoin software. Bitcoin is the most popular and dominate among all the currencies. Bitcoin has seen tremendous success over the years starting from less then one cent to breaking $6000 per coin late this month. The price at the time of writing this guide is 6100 US dollar.
2.ETHERUM
Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. Which basically means that it uses the same public ledger technology as bitcoin does but in addition it allows users to makes apps on its platform. It was first proposed by bitcoin developer Vitalik Buterin. It was later funded by crowd-funding. It uses Ether as it main currency to compensate developers and also used for trading. The price of Ether has recently seen a good and is holding strong at 300 US dollars.
3.Ripple
Ripple is a bit different then traditional coins since it is deigned to be a instant payment system. It is built upon a distributed open source Internet protocol, consensus ledger and native cryptocurrency called XRP (ripples). Ripple is designed to facilitate instant bank to bank to transfers which would usually take a couple of days. This is a bit different since crypto usually shy's away from banks and government but if ripple is successful in monopolizing this niche it could be worth alot more. Right now the price is 0.20 cents a coin.
4.Litecoin
Litecoin was created by Charlie lee. It is considered the silver to bitcoins gold. It's 4x faster processing time makes it ideal for small purchases. It follows the same public blockchain technology as bitcoin but has a different hashing algorithm which basically means its bitcoins little brother. The price of lite coin jumped for $3.5 to over $60 in just a matter of months in making it one of the fastest growing coins of 2017. The current price is $62.
STORING YOUR COIN
Like any other real currency, cryptocurrency is stored in wallets. Each wallet has a unique address and private key which are used to send and receive coins. Lets run down some wallet options.
1.Online Wallets:
Online wallets are, you guessed it, online. These wallets offer online storing solutions for multiple coins. One of the main plus point is that you can access your coins from anywhere as long as you have internet connectivity. However, by storing your coin on these site you don't control your private key thus leaving your coins at the mercy of the website.
2.Exchange Wallets:
Many exchanges offer free wallet options you can trade and store your coins on the site but again you don't control your private key which means you don't control your money.
3.Software Wallets:
Many coins have their own wallets that can be downloaded from their website. These wallets are installed on your device and you get a private address and key. One of the most popular wallet is Exodus which provides support for multiple coins including Bitcoin, Litecoin, Ehter and Ripple. You can download them here:
Bitcoin: https://bitcoin.org/en/choose-your-wallet
Litecoin: https://litecoin.org/
Ethereum: https://ethereum.org/
Exodus: https://www.exodus.io/releases/
POPULAR MARKETS TO PURCHASE CRYPTOCURRENCIES
Okay know that you know what cryptocurrency is and how to store them you need to know where to buy them. Lets start.
One of the sites where you can check real-time prices and get more information is https://coinmarketcap.com
This site is really help full since it provides exchange rates of almost all the altcoins from multiple exchanges along with detailed charts and analysis.
COINBASE: https://www.coinbase.com/
Coinbase is a popular beginner site in the sense that they offer credit and debit card purchases options along with bank transfers. Credit and debit purchases are instantly credited to your account bank transfer takes up to 4 days. Its available online and also on ios and android. It supports Bitcoin, Litecoin and Ether.
GDAX: https://www.gdax.com/
Gdax is owned by the company as coinbase and was developed to be the opposite of it. Where coinbase is more beginner friendly Gdax was made for day-traders and more experienced individual. It offer fee-free exchanges when you make orders. It links up coinbase enabling you to transfer coins instantly between the two. At the moment it only supports Bitcoin, Ether and Litecoins.
GATEHUB: https://signin.gatehub.net/
Gatehub is a multiple coin exchange site not only can you exchange in usd but also in xrp, Btc Eth and many others. It also provides wallet solutions and fee-free trade.
Bittrex: https://bittrex.com/
One of the markets with a more wide selection of coins. It mainly deals in USD and bitcoins which means that there are two markets one where you purchase in USD and the other in bitcoin. Coins range from Bitcoins to small coins like siacoin.
PROS AND CONS OF CRYPTOCURRENCY
PROS:
- Easy way to make money.
- Secure markets.
- Fast transactions.
- World wide access.
- Instant Payment options thus promoting business and commerce.
CONS:
- Very volatile meaning it goes up and down in an instant.
- You could lose more than you earn if your not careful.
- Irreversible transactions. If you make a mistake or are hacked there is no way to get your money back.
CONCLUSION
In conclusion Cryptocurrency is a very useful asset to have. They are many cool new projects coming out that have great potential to earn you some extra money so check it out.
Okay that's all the basic things you need to know about the crypto world. Hope you found it helpful share it with your friends and family that might be interested. Always do your own research before you get into buying and trading because at the end of the day it all comes down to you and the decisions you make.
THANK YOU AND PEACE OUT!
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