Today we are going to go over a complete Cryptocurrency guide for beginners.

Summary:

WHAT IS A CRYPTOCURRENCY

WHAT IS MINING?

WHAT IS A USE CASE?

EXAMPLES OF USE CASES

THE EASIEST WAY TO BUY CRYPTOCURRENCIES

HOW TO AVOID SCAMS

HOW TO SECURE YOUR CRYPTO

 

WHAT IS A CRYPTOCURRENCY

  • A CryptoCurrency is a digital currency that uses block chain or a ledger to secure assets and transactions. Creating false transactions & stealing funds become a lot more difficult with the Blockchain system in place.
  • To use the currency you have to use a unique address to send and receive funds. You receive a private key and that private key can be used to access to that wallet. Presumably no one without access to the private key cannot access your funds.
  • A cryptocurrency can either be mined or issued.

WHAT IS MINING?

  • Mining is the process where transactions are confirmed and sent to the public block chain resulting in new coins being created.
  • The transactions are put into a “Block” the first person to mine the block and get to the next block receives the new created coins.
  • Miners also charge a fee to incentivize mining after there is no more supply to mine.
  • Anyone with a computer and internet can mine coins, some coins are harder to mine than others and require expensive hardware. Some coins can simply use the cores of a pc to mine coins.

WHAT IS A USECASE?

  • A use case is a description of how a person who actually uses that process or system will accomplish a goal. It is typically associated with software systems, but can be used in reference to any process. For example, imagine you are a cook who has a goal of preparing a grilled cheese sandwich. The use case would describe through a series of written steps how the cook would go about preparing that sandwich. A use case helps you understand where errors could occur in the process and design features to resolve those errors.
  • Use cases are very important & provide a road map or expectations to an investor.
  • For example a coin may be more valued than another due to use case. It helps investors

EXAMPLES OF USE CASES

  • Bitcoin is a peer to peer electronic cash system. Its use case is to send digital money using blockchain while having no central power. Using cryptography to solve puzzles and completes blocks it issued through a proof of work system
  • Ripple on the other hand is used to make a process cross border payments rather it be individuals or a bank. As most banks have fees and transaction costs on current payment systems Ripple looks to making transactions for companies and individuals for just pennies.
  • Monero focus on private transactions for their product. While most of their transactions are not private. Anyone looking to keep transactions private use this coin to do it.
  • Ethereum is an open-source, public, blockchain-based distributed system featuring smart contract. Ether can be transferred between accounts and used to compensate participant mining nodes for computations performed. ICOs can be easily created on the Ethereum blockchain.

THE EASIEST WAY TO BUY CRYPTOCURRENCIES

  • This is the most common way to buy crypto.
  • Download “Coinbase” on the Google Play Store or the Apple App Store.
  • Create an account and enter your bank details.
  • Your choices on Coinbase are Ethererum, Bitcoin, Bitcoin Cash & Litecoin.
  • Research on certain coins will be provided in future guides.
  • Once you have bought your first coin , either you can hold that coin for an investment or you can use that coin to buy a variety of different coins on different exchanges all over the internet!

EXCHANGES & WHAT THEY HAVE TO OFFER:

BITTREX

  • Bittrex is a commonly used exchange for alt coins. You can buy and sell tons of different coins with different use cases and prices.

POLONIEX

  • You can trade alt coins to Bitcoin for 2.5x margin. It is owned by Circle. They have less coins to offer then bittrex and some complain about flaws in design.

BITMEX

•Bitmex is an exchange where can you trade future contracts on levarge anywhere between 1–100x.

•It’s the most commonely used exchange for leverage trading

HOW TO AVOID SCAMS

  • An easy way to identify a scam in crypto is to always read the white paper. The white paper is a road map to how the product works and goals of a product. Yet most projects within crypto don’t have a working whitepaper.
  • Research the products team members and the people who run it. If you run into problems trying to identify or validate that work has been done, its most likely a scam
  • Look into the creators of a coin. If they have no information or seem like a made up person, it’s a red flag.
  • Always make sure the company you invest in has a working product & not an unfinished one that may never come to market.
  • Most Crypto coins have open projects sources available if it looks like a mess that’s a red flag.
  • Promises of deals or promotions are usually done by companies who need capital fast and usually are scams. Impossible returns promised are also a red flag

HOW TO SECURE YOUR CRYPTO

  • You have two common options when you hold a coin.
  • You can either keep then on an exchange where they exchange owns the keys to an account. Some people see this as problamatic incase the exchnage were to shut down and hold your coins.
  • You can also have your own wallet or have a hardware wallet where you own the keys and no one else does, this is the most secure way of securing funds.
  • The key given to you must be kept in a secure place or memorized as anyone with this key can potentially accees your funds.
  • Always have a back up incase you run into problems and need to access your coins another way.
  • Encrypt your data
  • Have a 2FA so that you have to enter a code before accessing funds.

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