So with the current rise of news around Bitcoin and cryptocurrency in general, I’m sure you are asking yourself what is it and wondering how you can get involved.But of course, before you can do that, you would need to know more about cryptocurrency.This guide will summarize how it works, and how you can get involved.
HISTORYThe first cryptocurrency, Bitcoin, was introduced an anonymous person under the “alias” of Satoshi Nakamoto in early 2009. He described it as a P2P (Peer to Peer) electronic cash system where it’s completely decentralized. Being decentralized means that there is not controlling authority and no servers involved. Comparing this to fiat currencies like the US Dollar or Euro, these currencies are regulated and controlled by their respective government bodies – making it centralized. The value however is based on the supply and demand of it to put it simply.So the gist of it is that, cryptocurrency is a type of digital money that is secure and anonymous.
So if there is no body/server to regulate the currency, how does it avoid users double-spending the amount they have? That’s where all of the users come into the equation.In a decentralized network for a cryptocurrency, all users play a part. This is done by the Blockchain. The Blockchain is a public ledger of ALL transactions that ever happened in the network since its inception.
This would mean that everyone would be able to see the balance of each and every account in the ledger. However, don’t fret as it’s completely anonymous. Only the wallet address is shown.Now, there’s over 1000 different type of cryptocurrencies in the market.
The current top coins as of 30/1/2018 are, Bitcoin, Ethereum and Ripple respectively.WALLETSWhat are wallets? Wallets are where you keep your coins. These wallets can be online-based or even in a physical form like a USB drive or just a piece of paper! Once you have a wallet, you are able to make purchases from cryptocurrency exchanges such as Coinbase, Binance, Bittrex and many more.
CRPYTOCURRENCY EXCHANGESThese platforms are businesses where users are able to trade Bitcoin for other currencies such as fiat money and even other types of cryptocurrencies.HOW IS IT CREATED?So how are the coins created? There are created through mining. Mining is generally done using computer hardware and a specific software to solve mathematical problems which then rewards them with a certain amount of coins. People who use their hardware to mine are called, “Miners”.To start mining is simple but you need a relatively powerful PC.
There’s even dedicated mining hardware called ASIC mining machines. In the current day and age, use your run of the mill PC to mine would reap no benefits as the demand is high, computing requirements in turn grew harder.If you are interested in mining Bitcoin, it’s very hard as it needs a large scale operation to mined due to the amount of computation power needed. However, you might be able to mine the newer coins with your PC, to keep in your wallets, hoping the coins to increase in value in the coming future.If you’d like to mine, one of the easiest way is to mine using Minergate as it has a very user-friendly interface.
HOW DO I BUY?For beginners, it’s best to start from Coinbase due to its ease of use. However, as of now, they only provide Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Once you research more into the various coins, you can then transfer some of your coins to exchanges such as Binance and Kraken to trade for other coins to diversify your portfolio.The best place to monitor the market for all coins for me is Coinmarketcap. From there, you are able to look at each of the coin’s history and which exchanges they are available at.CONCLUSIONSo that’s the end of our Cryptocurrency for Beginners guide.
I hope that it has given you readers a much clearer picture regarding cryptocurrency.Good luck!- Maha