For all those curious about the crypto industry ready to dip their toe in the water, this one is for you. Below we share a warm welcome to the industry with a range of helpful resources covering everything from what cryptocurrency actually is to how to buy and store it. For individuals and businesses alike, let's get into it.
What Is Cryptocurrency?
A great place to start for any people who are crypto-curious, let's cover the basics. Cryptocurrency is essentially digital cash that can be transferred from one person to another without having to rely on an authoritative entity (like a bank or government or financial institution).
This peer to peer cash system is supported by blockchain technology, a technology that facilitates the transactions and essentially acts as a giant public ledger where anyone can view any transactions that have been made on the network.
Through the use of blockchain, a decentralised network (meaning that no one is in charge, rather everyone follows the same protocol) of computers is responsible for verifying and executing transactions. Depending on the network this can be done in a few seconds or up to a few minutes, causing big waves in the traditional financial sector.
If you take away just four points from the above, let it be
- Digital cash
- Peer to peer
- Blockchain technology
- Decentralised
Cryptocurrency gets its name from cryptography currency, as it uses encrypted code (cryptography) to secure and maintain the network.
Each cryptocurrency will have a value, based on what it was last traded for, a market capitalisation, a circulating supply and a ticker symbol. The ticker symbol would be BTC for Bitcoin and ETH for Ethereum.
Let's Take A Look At The Three Biggest Cryptocurrencies
You've definitely heard of Bitcoin, but what about the other top cryptocurrencies? Below we give a very quick breakdown of the other big projects on the scene based on the biggest market caps. When learning about new coins we strongly advise that you do your own research before making any purchases.
Bitcoin (BTC)
A digital cash system that facilitates the quick and cheap cross-border transfer of money.
Ethereum (ETH)
A blockchain platform that allows developers to create their own decentralised applications on top of theirs.
Tether (USDT)
A stablecoin, meaning that its value is pegged to a fiat currency, in this case, the US dollar. 1 USDT will always be worth $1. Stable coins are a great way to enter the market as they are less volatile than traditional cryptocurrencies.
How To Store Cryptocurrency
Similar to fiat currencies, cryptocurrencies need to be stored in a wallet. As the currencies are entirely digital, so too must the wallet be. Each cryptocurrency operates off a different network, requiring one wallet for each network.
For instance, you cannot store Bitcoin in an Ethereum wallet as Bitcoin runs off a separate blockchain. Different to fiat wallets, digital wallets are how transactions take place. From your wallet, you will enter the crypto wallet address of the recipient and execute the transaction from there.
To purchase and accumulate cryptocurrency, you will first need a wallet. There are a few different types of wallets, but let's keep it simple for now.