Author: Maria Alfano
Crypto for beginners is just what you need to break into the world of digital currency. Can you imagine how scandalous it was for our forefathers when someone recommended that paper money could replace the gold coins they carried around? Paper was light and easy to put in their pockets. But, there were so many things to consider. How would one know the paper was legit? What would stop anyone from creating counterfeit paper bills? Why would any merchant want to accept paper money? All these questions and more were thoroughly discussed and measures were put in place.
Today no one walks around without at least one denomination of paper in their wallet at any given time. It seems ridiculous that our ancestors were so afraid of it. And yet, here we are on the brink of a new form of currency and we have the same appreciation as they did back in 1690 when paper money was introduced to America.
I know what you’re thinking. My paper money, credit, and debit cards work just fine. Who needs cryptocurrency? At this time you don’t need cryptocurrency but it might be a good idea to understand what this bad boy is all about. Take the time to do your research before making any decisions. Heck, We might not have a choice in the near future but to use only digital currencies on a daily basis.
Crypto For Beginners In Easy To Understand Terms
What exactly is cryptocurrency? Where did it come from? When did it first come into existence? Who can own crypto? How does it work? All are very important questions. This post will attempt to answer them for you in such simple terms that even a 5-year-old can understand.
What is Cryptocurrency
With the volume of online spending that has exploded over the most recent years, folks wanted a more secure way to exchange funds for goods or services. Cryptocurrency allows people to do just that. There is no longer the fear of your credit or debit card information being hijacked and being fraudulently used. In the simplest terms, you will need to buy crypto coins using your “paper money”.
Where Did It Come From And When
The very first crypto coin to be mined was Bitcoin back in 2009. Since then records indicate there is somewhere between $1.9 and $2.1 trillion dollars worth of tokens available on the market. Cryptocurrencies are traded like any other stock would be and their value will rise and fall. It was developed by Satoshi Nakamoto in Japan.
Who Can Own Crypto
At this time there are many ways to purchase cryptocurrencies. Almost around the world can own a piece of a coin. I say almost because not all countries consider cryptocurrency legal. China, Bolivia, Indonesia, Turkey, and Egypt have banned crypto.
The first to the market is Bitcoin which has a value of between $50,000 to $70,000 depending on the market fluctuations. And, that is for just one token. The good news is you can purchase small pieces of a token at whatever amount you can afford at the time of purchase. I started my venture into various cryptocurrencies with a mere $500. That gave me a 5x return in less than 2 years. Definitely not what my bank would give me in interest.
No matter what type of investment you make always protect yourself. Crypto for beginners encourages you to buy only from reputable companies like Coinbase, Webull, or SoFi Active Investing to name a few. Buy coins that you can clearly define who owns them and determine if any big names invest in them. It’s more likely you’ll be buying a legitimate token if Warren Buffet owns some. Also important is knowing that by purchasing tokens, you are not purchasing a piece of the company and will not be partaking in the annual profit sharing.
Crypto Terminology
As with any new thing you experience, you will need to get a grasp of the crypto jargon. You may have noticed I used some of these terms already. Now, we just need to get you caught up on what they all mean. Crypto for beginners will use common everyday English to explain the basics so you can start your journey into crypto investing. One of the key factors making cryptos so popular is the removal of the central banks. Banks tend to devalue cash through inflation. Yet, cryptos are susceptible to market trends.
How It Works
Cryptography – extremely complex code that is created to protect coins. These equations are so complex that they cannot be broken thus rendering them impossible to divulge user-sensitive information or to create counterfeit tokens.
Crypto Mining – if you are brave and you own high-powered computer hardware called an ASIC you can mine your own BItcoin. Essentially, your computer will have 10-minute intervals to solve the highly complex mathematical equations. In return, you are awarded a 6.25 Bitcoin. Not a bad payout for 10 minutes of work. 6.25 Bitcoin x $50,000 (average) per coin gives you $312,500 in conventional funds. That is more than most people make in a year let alone 10 minutes. This equation changes often so that only one computer can solve the puzzle every 10 minutes. Hence why miners often own a crypto farm – a large number of these ASICs in order to increase their chances of being the one to solve the puzzles.
Blockchain – think of this as the general ledger for conventional businesses. It is a list of all the transactions that have transpired with a particular crypto coin. Copies of this blockchain (ledger) are stored on every computer that is used for mining. Every transaction is closely monitored and is not considered complete until it is recorded on the “ledger”.
The Coin
Token – what the digital coins are called. Think of them as the tokens you purchase to play your favorite arcade game. You put in your dollars and you get the tokens. You insert the tokens into the machine to play the game. Many companies have now created their own tokens You purchase a bunch of tokens from them to use whenever you need to buy their products or services. The number of tokens is deposited into a virtual account with your name on it. As you use them the account depletes. When you buy more tokens the account increases. This is all done online. You never touch the physical tokens.
Crypto Wallet – this is a digital wallet that holds the keys (passcodes) to all your coins. WIthout a crypto wallet, you cannot exchange your tokens for goods and services.
In Summary
You now have a basic understanding of crypto for beginners. Rest assured you don’t need to know how to mine for cryptocurrencies, own a mining farm, nor do you need a blockchain to buy a piece of a token. All this is within your reach. Whether you have $5 or $50,000 you can purchase a reputable coin bit from a reputable company.
We would love to hear from you. Was this helpful for you to get familiar with the basics of crypto investing? Which coin have you invested in?