Master the crypto
Searching for some basic knowledge on crypto? Willing to understand all the key aspect regarding the newest financial trends? This article is going to lead you through the most popular thematic, conquering the market.
Ever since crypto appeared as a term, it always meant supporting of an idea in a covertly way. There are many different conceptions about it, but today we’re going to focus on just one. So, once again, let’s precise the context of our subject. We’re looking at the crypto as the base of the financial doctrine, built on the Cryptography’s conception.
Have you ever wondered why there’s no crypto book? Some time ago, it was so easy having enormous paper supporting sources, all kept in the library. Remember the encyclopedias you have read a decade ago? Did you miss the simply arranged model of all the information you need? There’s some good news for you. This article is your ultimate dictionary to use when aiming to become a part of the crypto world.
Scroll down and get everything needed to make crypto a part of your daily-routine.
Digital money’s world
Money’s world is frequently considered as a jungle of different variables, which are constantly changing and are hard to be updated on. Most of the people got tired from the bank’s centralized power and regulations, deciding the currencies rate and causing economic crisis. Here comes the idea to build a decentralized financial world, where every user can manage his own money, without any third-party involvement.
First of all, we would like to present you the crypto-parent of the contemporary financial conception – the blockchain.
- A public ledger, recording chronologically and publicly pieces of information.
- All the data is separated and stored in blocks.
- When the block’s size is filled, there’s a new one generated, which grows the blockchain.
- In crypto, it is an open history database of all the financial transactions in the network.
Contemporary financial utopia
You might be curious how the decentralized digital idea in tandem with the blockchain technology could change the financial market. There was an idea born to create a decentralized currency, accessible all over the world. This led to inventing the digital version of fiat money – cryptocurrencies. Why crypto? Because of the based used for creating it – a cryptographic algorithm. Anyway, let’s start with something pretty easy to recognize – check the following video from the TEDx School’s conference to get more aware of how it actually begins:
Does it get clearer now? A question may pop-up at this point. Are cryptocurrencies the descendent of fiat money? As a matter of fact, they are in an early stage of development. There even aren’t strictly fixed regulations. Actually, it’s gaining popularity fast all over the world. Ultimately, the first who were brave enough to invest at the very beginning, already profit enormous amounts of coins.
In the digital marketing era when everything becomes electronic, where people avoid cash paying and try to operate all their agenda using only a smartphone, crypto coins are the newest trend to try.
How to become a crypto terminator
You’re thirsty for some financial innovations? Hungry for an appetizing crypto bite? If your aim is to be bulletproofed when speaking of crypto knowledge, you would definitely want to know how you can apply it. In order to become a part of the crypto sphere – operate with coins, checking statuses on a daily basis, following prices, selling and buying another currency, and of course – cashing out your incomes, before all you have to possess some coins.
Generally, there are two ways to obtain some cryptos. On the first place, you can simply buy some of it, using a crypto exchange. Here we observe an optionality – buy it either using your national currency, or another coin you already possess. On the second place, you might want to try mining crypto coins. Imagining pickax and helmets? Well, not really. Keep reading.
The crypto terms’ encyclopedia
To begin with a motivation, we would like to lead you through our dictionary, which might become your best crypto advisor during your mining journey. We’re about to explain each of the basic terms, so you could continue following your crypto goals.
- A cryptocurrency industry synonym.
- The ecosystem supporting a cryptocurrency’s project.
- A digital currency, using cryptographically orientated algorithm.
- A blockchain based project.
- Payment function frequently used also for trading goods or other profits.
- Decentralized control
- Low transaction costs
- Energy consumption
- Volatility in price
It always sounds more familiar if we add an example. Now, imagine you have a thousand dollars to send to a friend. If you use your bank account, you’ll pay between 3 and 5 percent of your total amount. If you do it via bitcoins, it will cost you around $3,50. Pretend doing the same with 10 000 USD, or maybe even 100,000. The bank is going to take you more and more money, depending on how big the amount is, while bitcoin’s transfer cost will stay just the same.
- Mostly a synonym of crypto currency.
- Bitcoin is the only one considered as a coin itself, all the others are simply altcoins (alternative coins).
It all started with a paper, called “A Peer-to-Peer Electronic Cash System”, written and published by Satoshi Nakamoto in 2008. That is how the first digital currency appeared on the market – Bitcoin. Since then it experienced lots of ups and downs, multiple speculations, but finally it became one of the most popular and profitable ways to earn money. The original idea for creating a decentralized blockchain to avoid financial institutions’ intervention have changed a bit, because some of the weaknesses, discovered with time. That is why new crypto altcoins are created all the time – to improve and follow Satoshi’s ideology.
- Mostly a synonym of crypto currency.
- All the coins, different from Bitcoin (the original coin), which are somehow alternatives, such as Ethereum.
Ethereum is the constantly second placed altcoin, first right after the Bitcoin, regarding the market capitalization. Implementing many features and improving many of Bitcoin’s cons, Vitalik Buterin – its creator, developed a platform for decentralized applications. The also called Ether is providing an optionality of ERC tokens, which are very attractive alternative for people with less investment opportunities. What is most interesting here, is that the owner and all his team are using Bitcoin to do their own payments. Exactly like BTC, Ethereum had its own fluctuations, but finally, it’s considered as the most stable altcoin on the market.
- A mixture of crypto currencies and assets on the market.
- Referring to the capitalization of each currency or token.
- A wallet keeping public and private keys.
- A software or hardware, which is needed to handle your coins.
- A must-have program for mining or trading cryptos.
Let’s dig a bit deeper into the wallets thematic. Similar to the physical wallet in your pocket, this one also keeps your money. Basically, you use it each time you would like to pay, send or receive any financial assets. The difference here comes with what’s behind it and how to choose one.
“A good example speaks more than a thousand words“ they say, so let’s proceed with one more explanation. Imagine your public keys are your email address. Everybody can have it to send you messages. Then when it comes to private keys, they are somehow your password – it’s only you the person, who should know it and use it in order to send emails or use the information sent. It’s the same with your wallet’s credentials. You can give your public address to everybody, so people would be able to send you coins. But only you should possess the private key to send, receive and operate with your crypto assets. Let’s have a look at the different wallet types in a rough overview:
As a matter of fact, hot wallets are considered less secure when compared to cold ones. Since they are online all the time, this makes them vulnerable. Opposite to the hot wallets section, cold storage are either devices or papers, which makes them more or less resistant to any hack attacks. Anyway, if you’re planning to keep your coins in a long term with investment purposes – better choose an offline wallet to do so. Otherwise, for daily usage it will be way easier to work with an online software.
- An online platform, which offers trading cryptos.
- A web software connecting buyers and sellers to achieve a successful exchanging process.
- Performing an exchange between national and crypto currency.
- Trading crypto assets, including coin, altcoins and tokens.
- Usually, a process performing in a crypto exchange.
- Extraction of crypto currencies using a mining hardware.
- Solving a complex mathematical equation to find a block of information’s missing piece.
- Adding blocks of data to the blockchain and receiving a reward for it.
Up to the present moment, there are two options when speaking of mining. You can perform it either using your own mining configuration or a rented one. The second options is also known as cloud mining. Let us summarize what are the main differences between both:
|Hardware mining||Cloud mining|
|Buy your own mining device||Rent a mining machine|
|Configurate your mining kit||Avoid any technical setups|
|Acquire some technical knowledge||Research the best provider on the market|
- A tool calculating your profit of both hardware and cloud mining.
- A program using the coin’s market capitalization characteristics and additional variables to provide you an estimation of your profit.
- Restrictions for the cryptocurrency’s usage, depending on the country.
- Banned mining process in Algeria, Bolivia, Ecuador, Bangladesh, Nepal and Macedonia.
- Illegal payment tool usage in Vietnam, Indonesia and Thailand.
As can be seen from the most commonly used crypto-terms, the decentralization and digitalization of the financial market aim to be the next economic revolution. Adoption might take some time to people in order to get used with it, but for sure cryptocurrencies are going to become a significant part of our daily routine. Consider buying some might be the best investment decision you’re able to make today. In the long run, become part of the early adopters can lead you profits.