So, It’s that time of the week where we will cover all the basic and general stuff about cryptocurrency and help our newly joined members get started with the crypto-space. We will talk about all the stuff that you needs to be gone-through before you enter this market like, what are cryptocurrencies, a general overview of bitcoin, some basic knowledge about blockchain, smart contracts, cryptocurrency mining, what are cryptocurrency exchange, how and where to store your crypto, types of trading and finally some precautions that you must take to avoid getting scammed.
Recently, cryptocurrency has sparked a lot of curiosity. On the news, from a family, or on Netflix, they’re frequently discussed. We have all come across someone in our lives that keeps boasting their winnings in crypto tradings.
What is cryptocurrency exactly? Cryptocurrency is electronic money produced with technology that controls its generation and protects transactions while concealing its users’ identities. The word ‘crypto’ initial; y comes from the ancient Greek word which is, ‘kryptós’, which basically means hidden or private. Currency simply means “currently used the money”. Simply put, Cryptocurrencies are a type of digital money that is supposed to be faster, cheaper, and more dependable than traditional government-issued currency. Rather than relying on the government to produce your money and banks to keep, distribute, and receive it, users transact directly with one another and store their own funds. Transactions are usually relatively affordable and quick since consumers may send money directly without going through an intermediary
Cryptocurrencies do not require you to trust a bank to retain your money because of public records. They don’t require you to have faith in the individual with whom you’re conducting business to pay you. Instead, thousands of individuals can observe the money being paid, received, validated, and recorded. There is no need for trust in this system. “Trustless” is the name given to this one-of-a-kind favorable trait.
Bitcoin is the first-ever successful attempt at creating cryptocurrency. Satoshi Nakamoto, a pseudonymous individual or group, presented an electronic payment system in 2009 that relied on a peer-to-peer network and cryptographic evidence rather than trust or a third-party system. Bitcoin transactions are recorded on a public ledger using blockchain technology to eliminate problems like double-spending. This allows anyone in the world to verify who gets paid first. Each transaction is represented by a case-sensitive address that anyone can use to receive the coin
Alternative alternatives to Bitcoin, known as altcoins, have sprung up in recent years. The majority of cryptocurrencies want to either replace or improve Bitcoin or to compete with one another. Each cryptocurrency claims benefits such as faster transaction speeds, more secure privacy, proof-of-stake, and many others.
All cryptocurrencies are built with the help of blockchain technology. What is blockchain exactly? Blockchain is a technology that allows you to create everlasting, secure digital records that aren’t reliant on a single person or group. Although the first example was developed to record bitcoin transactions, blockchains can store any information. Consider the blockchain to be a ledger. Every page of that book is a block that may be used to record anything. The blockchain is made up of blocks that are created one after the other and joined together.
A smart contract combines blockchain technology and contracts to create a more efficient and cost-effective corporate system
A smart contract is an agreement between two persons doing business to exchange money for anything else. It activates, delivering what was purchased if both parties’ contract terms are completed on a specific date. The contract deactivates and returns whatever it was storing if the requirements are not met.
Alex, for example, is seeking 1 bitcoin from Rob, whereas Rob is seeking $16,000. Both Rob and Alex agree that the bitcoin and cash will be placed into the smart contract’s accounts on October 1, 2021.
Now, even if you simply google the word crypto, ‘mining’ will probably be a very common search suggestion. What is mining exactly? Mining is the computer-assisted process of recording and verifying data on the blockchain, a digital ledger. Because mining necessitates the use of computer power, people are paid to accomplish it. Each machine that completes this process is eligible for a reward in digital currency and, on rare occasions, completely new, virgin coins. Sweet right? Do you get money in exchange for computing power from your ten-year-old laptop that’s been lying around? Not exactly. Mining is an extremely taxing process and requires immense processing power. This processing power costs electricity, both to keep the computers running and cooling the surroundings of the computers due to the excess heat generated by the overworked computers. This is why mining is an expensive ordeal, much like starting a bodega. You require considerable capital to actually make a profit in crypto mining.
Well, all this is awesome. But how do you get your hands on these cryptocurrencies that people everywhere are talking about? You’ll probably want to select a crypto exchange because it’s the most popular method. These let you acquire cryptocurrencies with your fiat currency (pounds, euros, or dollars) and exchange between different forms of crypto
Cryptocurrency exchanges come in many forms and sizes, so deciding which one to use isn’t always easy. Make sure your chosen exchange allows you to trade the crypto tokens you’re interested in, as well as convert between fiat currencies. You should also consider the transaction costs charged by exchanges, if any, and make sure you’re comfortable paying them.
The most important thing to remember is that cryptography is all about having public and private keys. A public key is similar to an email address in that it is used to transmit and receive money (or emails). And, just as you wouldn’t reveal your email password, you shouldn’t disclose your private key, which is what lets you access your money.
It’s dangerous to leave your money on a cryptocurrency exchange. You’re effectively handing over your private key to the exchange, and if something goes wrong, you’ll be kissing them goodbye (that’s where the unregulated part comes in). Transferring your assets to a “wallet” — where you may keep and manage your cryptocurrency — is a better approach from a security aspect. To put it another way, a wallet allows you to take control of your private key and keep it safe. Wallets also exist in a range of shapes and sizes, with some supporting only one cryptocurrency and others supporting multiple, as well as a variety of other services.
Also, with wallets, you can directly trade using a DEX i.e, Decentralized Exchange if you have an online wallet then you can just connect your wallet to a DEX and there you go, you can trade safely this way, it’s also a good option if you want to trade anonymously and also there is no need of KYC there, with DEX your crypto will always remain in your wallet and you can trade with increased security, but remember this has a lot of downsides also don’t share your key with anyone or connect your wallet to unsecured sites.
The Dark Side
However, you must exercise utmost caution while trading cryptocurrency, especially if you’re a beginner. Unfortunately, scams are common in the cryptocurrency sector. One explanation for this is blockchain transactions’ “immutability”: they cannot be reversed.
Keep an eye out for phishing and “social engineering” frauds. These entice you to reveal personal information, allowing a hacker to steal your identity, or to input your password or private key on a phony version of a legitimate website, for example. To keep safe, make sure anyone who contacts you is legitimate — and stay away from promises that appear too good to be true.
Hackers may potentially attempt to break into an exchange and steal the tokens that are kept there.
Types Of Trading
There are a few different ways to invest in cryptocurrencies. The ideal technique for you will most likely come down to whether you want to actively trade or merely follow the overall rise and fall of cryptocurrencies.
What’s the difference? Active traders purchase and sell on a regular basis, hoping to profit from market troughs and peaks, much like people who trade in any other market, from oil to orange juice. They’ll try to examine projects and may have an excellent understanding of the industry as a whole. Many will employ technical analysis approaches, in which previous price data is examined to aid in future decision-making.
Passive investors, on the other hand, are perfectly content to just acquire cryptocurrency and hang onto it in the hopes that it will rise in value.
Now that you have the basic idea about crypto, don’t just sit there! Go do some more reading and TRADE!
So, I think we have covered all things and all the basics knowledge that you must have to understand this space better, So, are you excited about it, don’t worry it’s not that hard to understand it just take your time and go through it again. Remember while investing go for good fundamental projects only, seeing other penny cryptos might get you greedy it happens to everyone but you don’t want to get scammed and get stuck with it believe me its not worth it if you think it’s hard to find good project just first go for the projects with high market cap those are the trusted once it does not guarantee anything but will definitely make things easy for you.