NOTE: This post is for newbies who have absolutely no idea what cryptocurrency is (but are willing to learn). If you are looking for a more detailed and advanced learning, then this is not for you.
You might be like me who was absolutely baffled with what bitcoin is. Perhaps a friend recommended you to invest on bitcoin but that same friend allowed you to stare at an entirely new concept without giving you any explanation at all. How can you earn bitcoins, and what is cryptocurrency? What in the world is ethereum and how different it is from bitcoin? Or you might be confused as of where to start.
To give you a whole picture with what is cryptocurrency, just take a look at your money inside your pocket. Put that tangible and physical money into digital form and now you have a cryptocurrency. It is in a form of codes and complicated system of symbols. Your digital money is inside blocks of records and to claim ownership of it, you need a key. But first, you need a unique keyhole in a form of digital wallet to unlock your access. Your private key is your access to have full control of your money. A compromise on your private key is a compromise to your coins.
...but for more technical explanation:
What is Cryptocurrency (ctc)? The simple answer is Digital Money. Others prefer to call it digital asset, though. Just imagine your physical money (called Fiat Money) as a medium of exchange. Since ctc is digital, it's key feature is cryptography, which the word implies as an act of writing a code or cipher. Rest assured that the transactions are secure since it is built upon a blockchain.
What is blockchain? You can never fully understand what a bitcoin is if you don't at least get the general picture of a blockchain, since it is the backbone of all cryptocurrencies. According to wikipedia (https://en.wikipedia.org/wiki/Cryptocurrency), a blockchain is a growing list of records. So to summarize, these sets of records are called blocks and the blocks are linked together with a chain called hash. The feature that blockchains boast is its security because it's impossible to alter the records. Its relatively in its infancy stage but many banks and companies are adapting to this technology because of its strong security feature. It's no surprise that the growth of cryptocurrency is growing rapidly with that effect.
If you need more in depth reading about blockchain and how it works, you can check out other resources.
Difference between centralized and decentralized.
Centralized. Obvious examples of this are banks and the government. In a centralized economy, the "trusted party" or the central authority makes the economic decisions. They decide the inflation of prices. In my country recently, the government had decided to increase the prices of sugar, fuel and alcohol because of a new tax scheme.
Decentralized. This exciting economic type is what attracts many investors and it is the main benefit of cryptocurrency (except for ripple, which is an outlier in the ctc world). Instead of using a "trusted party" to validate the transactions, ctc uses "proof-of-work" system. The transactions are then recorded in a blockchain, therefore preventing inflation. The best example is bitcoin which is not controlled by any central figure. If you heard other people telling you the government cannot regulate bitcoin, this is the reason why.
What is Bitcoin (btc)? Bitcoin was created in 2008 by an individual or a group of people named Satoshi Nakamoto. No one knows who this guy is, really. In 2010, it's as if Satoshi disappeared from the surface of the earth.
People call it digital gold as 1 bitcoin is $8000 in asset. However, its value is very volatile - 7 times volatile than gold. More than hundred thousand merchants accept btc as a method of payment. You can store your btc in a digital wallet and exchange it to fiat money.
What is a Bitcoin Address? This is where your bitcoins are registered to. It's formatted with long string of random letters and numbers. It is the 'location' of your bitcoin in the blockchain.
A private key unlocks your ownership of the bitcoin in the blockchain and gives your control over it. Once you lose it, there's no other way to access your wallet so having a copy of it is useful. If you want information on how to create a wallet, you can refer to this useful link: ----------
A public key looks similar to the private key. Although not entirely accurate, I imagine it like a bank account number: I can make it publicly available if I want to get paid or if I ask for a donation.
How can I earn Bitcoins?
- Mining: This is when your computer solves complex maths and you are rewarded with btc. This is a pretty complicated method and as a newbie, you can learn this later after knowing the basics.
- Accomplishing tasks from certain websites. This method gives you very little returns.
- Lending. make sure that you are lending your btc with a trusted individual.
- Trading.
- Airdrops
- Join bounties or campaigns in this forum. Refer to this thread: https://bitcointalk.org/index.php?topic=615953.700
Refer to this thread for more information: https://bitcointalksearch.org/topic/m.14335511
So how do I start?
First, you have to create a wallet, then, put bitcoins in it. If you are starting fresh without any money, you can earn btc for free through airdrops or through joining campaigns. Forums like bitcointalk can help you learn more about the ctc world. Learn about other coins as well. Nowadays, it's pretty basic if you know the difference between bitcoin and other coins like ethereum. It is normal for a trader to have 2 or more CTCs.
What is Ethereum? It was formed in 2013 as a computing platform. It was created on a blockchain that uses Smart Contracts. Ether is the cryptocurrency generated by the Ethereum platform; however, these two names are used interchangeably as reference to the cryptocurrency. In 2016 though, it was split into two blockchains: ETH (ethereum) and ETC (ethereum classic).
Other popular coins are called Litecoins, Ripple, Monero, Waves, etc.
Enough with the spoon feeding. Anyway, this forum is a bountiful place for you to learn loads so make sure you maximize the search option!
Topic: Cryptocurrency Simplified (Read 103 times)
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