Want to get involved with cryptocurrency but have no idea where to begin? Here are five easy-to-understand tips for people…
Cryptocurrency is a big topic, and things can get a little confusing once you start to dig into the details. That’s why we’ve created a series of crypto guides to explain the major concepts and simplify the terminology. If you’re wondering what the blockchain is, how tokenization is changing markets, how to set up a crypto wallet or what all the fuss around “ICOs” is about, you’ll want to take a look at our guides below.
Before getting started with your first Bitcoin wallet or cryptocurrency exchange account, it makes sense to learn about crypto from the ground up. This is a completely different way to view online payments and money itself, so it’s important to understand the key differences between cryptocurrency and something like PayPal or your traditional bank account before you start playing around with real money. The guides outlined on this page will help you understand every facet of the Bitcoin and cryptocurrency industry, and you’ll be ready to hold some Bitcoin or spend it at an online store in no time. You’ll also learn about some of the more futuristic use cases for cryptocurrency and blockchain technology, such as decentralized applications and smart contracts.
Anyone who is getting started in the Bitcoin space for the first time will want to read a guide to cryptocurrency before they get started. This is a completely new and complex technological innovation, and we’re still not at the point where it’s easy for everyone and their grandfather to use digital currencies as easily as email or Facebook.
To get started with Bitcoin and other cryptocurrencies, you’ll first want to understand the concept of a wallet. This wallet stores the private keys that are associated with your cryptocurrency holdings. You can think of it as the password for your cryptocurrency account. However, a key difference in the way cryptocurrency works is that you must take full responsibility over the security and access to your cryptocurrency private keys. If you lose your private keys, then you lose access to your money. Another way to think of it is as cash. If you lose your wallet and it had $100 in it, then it’s not like you can call up your bank or credit card provider to get your money back.
Of course, you’ll need to interact with someone else who has some cryptocurrency to send to you before you can have any in your wallet. Bitcoin and other cryptocurrencies work like any other form of money, which means you can simply exchange them for goods or services if you’d like. However, these are still early days, which means most people simply connect their bank account to a centralized exchange in order to purchase their first crypto asset.
There is a ton of mystery around Satoshi Nakamoto, who was the inventor of Bitcoin, but it’s important to remember that the real world identity of this person or group of people doesn’t actually matter. Bitcoin is a completely open-source, permissionless, and decentralized system. Nobody has to trust Satoshi in order for the system to operate properly and provide value to millions or billions of people around the world.
Here’s a little crash course to get you started with cryptocurrency:
Although many people view the beginning of cryptocurrency as the launch of the Bitcoin network in January 2009, the reality is that the underlying technology behind this completely new financial system was decades in the making. There were various proposals for electronic cash systems in the 80s, 90s, and 2000s, and Bitcoin has simply turned into the most successful iteration of a digital cash system up to this point. Many of the digital currency systems created before Bitcoin failed due to their reliance on centralized services. Bitcoin creator, an anonymous individual or group of individuals called Satoshi Nakamoto, solved this issue by enabling a network of pseudo-anonymous miners to handle the transactions. Satoshi’s ability to solve the double-spending problem in a decentralized manner allowed Bitcoin to resist the many pitfalls of centralization in digital cash systems, namely being influenced or completely shut down by regulators.
Once Bitcoin had been operating for a few years, it began to gain value among internet users. Perhaps it was nothing more than a collectible at first. Eventually, people started trading Bitcoin for goods and services, such as the infamous pizza order involving an amount of Bitcoin that would be worth tens of millions of dollars at today’s Bitcoin valuation.
Here are some of the important things you should know about the history of crypto:
The best way to get started in the cryptocurrency industry is to learn from those who have been in the space for a number of years, which is why we have written a large number of introductory guides here at CryptoVantage. Whether you first became interested in cryptocurrency due to the use of Bitcoin as digital gold, the boom in initial coin offerings, or decentralized finance, we have you completely covered in terms of learning about any aspect of this new financial technology. Our team of experts are here to do some hand holding while you take your first steps into the world of cryptocurrency.
When in doubt, just Ask CryptoVantage:
If you already own some cryptocurrency, then you may be interested in learning what you can actually do with your newly-acquired crypto assets. Whether you plan on simply holding your crypto assets as speculative investments, interacting with decentralized applications, or doing some online shopping, we have plenty of guides to help you along the way in your cryptocurrency journey.
Even if you’re only interested in holding your Bitcoin for a long period of time, you may still want to learn how to take your cryptocurrency off of an exchange and into your own wallet. After all, you aren’t really using cryptocurrency in the way in which it was originally intended if you just leave your coins on Coinbase or some other centralized exchange. If you’re going to be in the cryptocurrency ecosystem for the long haul, then you’ll want to learn how to take control of your own private keys and securely store them in a wallet. This process comes with a large amount of personal responsibility, but our guides can help you learn how to securely store your Bitcoin and other cryptocurrencies using multisignature addresses or hardware wallets. We’ll also help anyone interested in spending their Bitcoin with an early introduction to the Lightning Network and other layer-two protocols.
Here are some resources for your next steps in cryptocurrency:
The legality of cryptocurrency varies from country to country and can even change between more local jurisdictions. For most countries, the main points of regulation are identity verification for users on exchanges and tax collected. Most regulators simply want to make sure that exchanges are preventing the ability of their platforms to be used for money laundering, in addition to making sure that everyone is paying their taxes. You can read our full guide on the legality of Bitcoin and other cryptocurrencies around the world.
Know Your Customer is a way to refer to various regulations around customer identities on exchange platforms. The exchanges must do everything in their power to make sure their platforms are not being used for illicit financial activity, such as money laundering and terrorist financing, by collecting a large amount of personal information about their users. Read our full guide on Know Your Customer regulations.
HODL stands for “hold on for dear life”. The term HODL comes from a drunken rant posted on the Bitcointalk forum in the early days of Bitcoin’s development as a financial asset. The user meant to type that they were going to keep hodling Bitcoin despite the recent downturn in the price. Since then, HODL has become a bit of a meme based around the fact that many Bitcoin users are going to hold onto their Bitcoin for the long term no matter what happens to the price in the short term. You can read more about the history of HODL here.
DeFi stands for decentralized finance. It does not have much of a clear definition, and it has become a marketing term used by many projects, much like “blockchain” and “smart contracts” had been previously corrupted. That said, the general idea of DeFi is to replace many functions of the traditional banking system with decentralized applications built on top of blockchains networks like Bitcoin and Ethereum. You can learn more about DeFi in our full guide on the topic.
Crypto tokens are the types of crypto assets that are built on top of another base blockchain platform. For example, a large number of tokens issued on Ethereum are created via the ERC-20 standard. These tokens usually represent some real-world asset or are necessary to access specific decentralized applications. You can read our full guide on crypto tokens.