Luna Sanchez
Cryptocurrency is a new and exciting technology with the potential to change our lives. Cryptocurrency has become popular in recent years, largely due to Bitcoin’s phenomenal rise in value. You may be interested in learning more about cryptocurrency for beginners, or you could even be considering investing some of your own money into this emerging field - either way, there are many resources available that will help you get started!
This blog post includes tips and tricks that should make it easier for beginners to understand cryptocurrency and provide them with some great resources along the way.
Cryptocurrency is a digital currency that uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds. Cryptography was developed as an alternative to traditional currencies because it allows transactions with no banks or government institutions needed for validation. Bitcoin, Ethereum, Litecoin are all different types of cryptocurrencies in this space.
Bitcoin is a type of Cryptocurrency that was created in 2009 by an individual named Satoshi Nakamoto . It’s the first decentralised digital, peer-to-peer payment system which doesn’t require any middle man to operate it or regulate transactions between parties involved in Bitcoin trades.
There are many advantages to cryptocurrency. Here are just a few:
- Cryptocurrency is decentralised, meaning there’s no need for any sort of banking system or government institution to validate transactions. This means that this type of currency can be spent without having large fees tacked onto the cost and you’re not at risk of your account being frozen.
- Cryptocurrency is not tied to any one country or subject to the whims of its leaders, so it’s a more stable form than traditional currency.
- Transactions with cryptocurrency are irreversible which means that there’s no way for someone on the other end of your transaction to chargeback and get their money back after you’ve already sent them the money.
- Cryptocurrency can be anonymous, so you don’t always have to worry about your transactions being tracked by some third party company or government institution and potentially used against you in a court of law for something unrelated.
- It’s much easier than ever before to buy cryptocurrency because there are many companies now that will sell it to you, some even letting you buy cryptocurrency with your debit or credit card.
- Cryptocurrency is a much more secure form of transaction than traditional currency or many other online transactions which are prone to hacking and theft.
- You can’t counterfeit Bitcoin because each individual bitcoin has its own unique code, so it’s impossible for people to make copies of bitcoins that they don’t actually have.
- Cryptocurrency is much more difficult to steal or lose than a credit card because it’s usually stored on your computer which you can put in an encrypted piece of software like TrueCrypt and then back up the data onto a CD, DVD, or USB drive.
With cryptocurrency, you are also your own bank with the responsibility of protecting and making decisions about what happens if something goes wrong. Keeping this in mind can help avoid frustration later on when a mistake causes the loss of your bitcoins.
Bitcoin transactions are not completely anonymous so there is no need for any personal information unless you choose to provide it, which can be helpful if you want to make larger purchases or withdrawals.
Bitcoin transactions are practically impossible to undo once they have been submitted and confirmed, be careful!
Bitcoin can be stored offline in a digital wallet that has been created, we recommend using the Trezor Model T or Ledger hardware wallets.
Like a bank, you should not keep all your bitcoins in one place. Bitcoin wallets work like banks so it’s important to only store the number that you want or need at any given time in order to avoid being hacked and losing everything.
It is best to find reputable news sources that can be used as reliable sources to make your investments from. Generally, this would mean looking at the following: national and international headlines, major newspapers (e.g., New York Times), or other high-authority websites such as Yahoo News or The Telegraph. When you do use a source from a lesser-known website, you should make sure that the site is actually legitimate and has been in operation for a while. Be aware that using the above sources means that you will likely be the last to hear about price rises, so you need to start paying attention to the charts, social media channels and other sources to get the best possible overview of the market. If you planning to be a long term HODLer (a term for holding on to your Cryptocurrency) then you may be less concerned with the market movements.
If you are using Bitcoin or any other cryptocurrency, be prepared for the volatility in prices that these currencies can experience. This means that even if something is worth $100 today it may only cost a fraction of that amount tomorrow because its price could change dramatically and then swing back again over time. Cryptocurrency markets are very different from traditional forms of currency and should not be treated as such. In 2021 a lot of newbie users have been attracted by the rise and rise of dogecoin without fully understanding the history of the coin. Investing as a coin such as Doge peaks is very dangerous and a lot of newbies can get FOMO (Fear of missing out) and join at the peak. Make sure you make careful investment decisions and follow Warren Buffet’s rule #1!
Altcoins are cryptocurrencies other than Bitcoin , like Ethereum or Litecoin or Dogecoin . Some Altcoins are built to be used as a payment method for other goods and services or investments. Others can just hold themselves on the market, like Bitcoin does.
A hot wallet is where you store cryptocurrency (usually Bitcoin) that isn’t actively in use.
A cold wallet is a storage device like USB stick or external hard drive, which will be offline most of the time and used to store your Bitcoins when they’re not being traded on an exchange.
It’s important to keep your cryptocurrency exchange accounts and any other wallets you use in a safe place. Some people store their Bitcoin on an offline hard drive, which is considered the safest way of doing it. You should also be careful about what device you’re using too – if someone else gets access to your computer or phone without permission they can take control of your digital currency.
We hope this article provided you with a brief overview of the basics for cryptocurrency and some of the tips and tricks you can use to make smarter investment decisions.
It’s important that you understand what cryptocurrencies are, where they come from or how you get your hands on them in order to invest wisely with confidence. If this has been helpful then I would encourage you to explore more about cryptocurrencies and Bitcoin. It’s never too late to get started in Crypto!
Securing your wallet: https://bitcoin.org/en/secure-your-wallet
Bitcoin Vocab: https://bitcoin.org/en/vocabulary
Bitcoin Wiki: https://en.bitcoin.it/wiki/Main_Page
Written By
Luna graduated from University College London with a BA in English, minoring in creative writing. She specialises in writing financial news and analysis, as well as cryptocurrency news and information.
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