Beginning in the world of cryptocurrencies
6 min read
Lately, cryptocurrencies have become very interesting for the crowd. However, they are attractive mainly because they enable quick earnings. In this article, I will present some cryptocurrencies, ways to exchange crypto into fiat currencies, the basis of blockchain, where we can store cryptocurrencies, mining ...
Before I focus on cryptocurrencies, let me present the basis on which all cryptocurrencies operate - BLOCKCHAIN. Blockchain is simply a way of chain blocks. Typically, one block consists of the number of the previous block, the timestamp, and transaction information. The timestamp proves that the transaction was carried out. Once a new block is approved it can no longer be cancelled or changed, this feature of Blockchain is very good in the case of signing “smart” contracts. This is a very simple explanation and probably not entirely correct but the purpose is just to illustrate how blockchain works.
Cryptocurrencies are digital currencies that have a variable value (some are fairly stable and some change instantly). Cryptocurrencies are decentralized, which means that they are not managed by banks or state institutions.
Bitcoin is probably the most popular and most-known cryptocurrency. The Bitcoin cryptocurrency was created by a group or a person named Santoshi Nakamoto in 2009. During this time, it has often achieved incredible values. The disadvantage of currency is that transactions are executed every ten minutes, which means that we cannot execute transactions in real-time.
Ethereum is probably the next most well-known currency. It was created by Russian programmer Vitalik Buterin in 2013 to eliminate shortcomings with Bitcoin. The advantage over bitcoin is that Ethereum’s blockchain is truly fully decentralized and allows for the signing of smart contracts without human intervention and allows for real-time transactions. On the Ethereum blockchain, we can create various so-called tokens.
Ripple is an interesting currency because it solves the bank’s problem. Above all, it is constantly under the control of currency makers. The cryptocurrency was created by the American company Ripple Labs Inc. in 2012. It enables exchange between currencies, simplification of transfers between users and ensuring traceability of transactions. Some predict that it was a decent replacement for the SWIFT payment system.
I will only mention the Monero currency, which is used by criminals due to its (almost) anonymity of transactions. The anonymity of the sender and recipient is greater than with the other currencies mentioned above.
Where do we store our coins?
Our coins can be stored in various wallets dedicated to cryptocurrencies. We need our wallets for each currency. This means that we cannot transfer Bitcoins to the Ethereum wallet.
Wallets can be of various forms online, physical, paper… For most wallets, it creates a security setting that allows us to restore the wallet if we forget the password or change the device. Therefore, this set needs to be memorized. Online wallets We access online wallets through a mobile or online application (usually both) and enable transactions with cryptocurrencies, some of which also convert between different currencies. Some require user identification.
Coinbase is an online wallet that is considered the most trusted. Trustworthy because many online wallets stopped working overnight and picked up all the cryptocurrencies they kept.
Bitpay is one of the established names in the field of wallets. An interesting feature of this wallet is that it allows us to order a card, which can then be used in the store and paid in EUR or USD.
Coinomi is an application that we install on our device, phone or computer. To me, this wallet is one of my favourites because of the support of a huge number of currencies.
Physical wallets are similar to an ordinary USB stick, only they have an even smaller screen and maybe a key to confirm the transaction. The advantage of physical wallets is that they are not tied to the web and are one of the more secure ways to store cryptocurrencies.
The most famous manufacturer of cold wallets. Their wallets allow you to store a huge variety of currencies. Most new one's work in conjunction with our phone.
The vault is the most interesting wallet for me, as it allows storing over 1000 currencies and storing passwords, confirming FIDO2 applications… They have two models available; one is for basic users and the other one is a little more advanced.
However, there is also the option to print our wallets on paper. One such site that allows us to do this is BitcoinPaperWallet.
How to get cryptocurrency?
Our coins can be obtained in different ways, someone can transfer them to our wallet, they can exchange them from e.g., EUR or USD, but can be exchanged between other cryptocurrencies. But we can mine them.
Exchange offices are (usually) various websites that allow us to exchange fiat currency into cryptocurrency. Most exchange offices also allow the exchange of cryptocurrency into ordinary fiat currency.
Binance is probably the most well-known name among cryptocurrency exchanges. It allows us to effectively analyze the movement of cryptocurrencies. It also allows us to purchase by bank transfer, payment by card… The Binance exchange office also has its currency. It also allows us to perform the exchange automatically.
Bitstamp is one of the more popular cryptocurrency exchanges. True, it does not allow the exchange of as many currencies as Binance but for those who operate on normal volumes, it will meet its needs. Credit: Cryptomag
The Revolut service also allows us to purchase and exchange cryptocurrencies.
Both exchanges require user identification when creating a user account.
An interesting cryptocurrency exchange is LocalBitcoins, where we can also arrange for a personal purchase of currency. However, we can pay or exchange in various ways, from payment via PayPal, to cash.
Mining is solving complex mathematical operations and validating transactions. For each problem solved, we get a reward in the form of cryptocurrencies.
Mining consumes a huge amount of computing power and electricity, so it is wise to first calculate whether mining pays off for us. This can be checked on the website, CryptoCompare - Mining Calculator.
Particular attention needs to be paid to how much tax there is for mining in your country.
There are dedicated ASIC miners who achieve large amounts of mined cryptocurrency.
An interesting thing is cloud mining, where we hire a certain amount of computing power and then we get the amount of mining.
I suggest for any mining visit to the NiceHash website.
On this page, we can look at the mass and performance of a cryptocurrency.
It allows us to view the value of a cryptocurrency in real-time.
It allows us to explore the Blockchain network of Bitcoin, Ethereum and Bitcoin Cash.
News from the world of cryptocurrencies.
The alternative site to CoinMarketCap.
Thanks for reading 😊.
Note: I am not sponsored by any sites.
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