Cryptocurrencies are all the rage right now. If you’re not familiar with them, don’t worry – we’re going to explain everything you need to know in this blog post.
We’ll start by discussing what cryptocurrencies are and how they work. Then, we’ll take a look at some of the most popular types of cryptocurrencies. Next, we’ll ask the question: is crypto safe? And finally, we’ll give a brief overview of some of the things you can buy with cryptocurrencies today.
What Is Crypto?
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Cryptography is a technique used to protect information from unauthorized access. Cryptocurrencies are based on a technology called a blockchain
What Is Blockchain?
Blockchain is a distributed database that allows for secure, transparent, and tamper-proof transactions. A blockchain is made up of a series of blocks, each of which contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain is often described as a digital ledger because it keeps track of all cryptocurrency transactions.
How Does It Work?
Cryptocurrencies work by allowing users to send and receive payments through a decentralized network. This means that there is no central authority, such as a bank, that controls the cryptocurrency. Instead, transactions are verified by a network of computers called nodes.
When a user wants to send some cryptocurrency, they create a transaction and broadcast it to the network. The transaction is then verified by the nodes and added to the blockchain.
Imagine a transparent and tamper-proof ledger that is distributed across a network of computers. This is what a blockchain looks like. For example, the Bitcoin blockchain is easily viewable by anyone with an internet connection.
Now, let’s say you want to send some Bitcoin to your friend. You create a transaction and broadcast it to the network. The transaction is then verified by the nodes and added to the blockchain. Your friend can now see that you have sent them Bitcoin and can view the transaction on the blockchain.
Where can I buy cryptocurrencies?
Coinbase, Binance, and Crypto.com are all popular platforms for buying and selling cryptocurrencies. These are all centralized exchanges that allow you to buy and sell cryptocurrencies with fiat currencies (such as the US dollar) or other cryptocurrencies.
PROS:
They are each similar in their offerings, so let’s evaluate the pros and cons of using centralized exchanges:
- Easy to use
- Can buy with fiat currency
- Beginner friendly
CONS:
- Not as private
- Can be hacked
- Fees can be high
Coinbase review
Coinbase is one of the leading exchange platforms there is. As the purchasing fees are pretty high it is common to say that coinbase is more suitable for longterm holders. This means that you hold your cryptocurrencies for weeks, months or even years (I am personnaly holding some ethereum (ETH) for about 3 years now and it’s value is growing over the years !)
| PROS | CONS |
|---|---|
| Secure storage | High fees |
| +100 cryptocurrencies available | Limited interest opportunities |
| Protected by insurance | |
| Vault protection | |
| Recurring buys possibility | |
| Mobile App |
To sign up for a free coinbase account and to get 10€ worth of Bitcoin click here. Once the account is made, you can start investing on the spot !
Binance review
On the other hand, we have Binance, which has one of the lowest fees of all crypto platforms ! Binance is also known for it’s enormous choice of cryptocurrencies (over 350 !)
This platform is suitable for day-traders, who trade little to large amounts within a day because of the very low fees of the platform.
If you’re interested in buying NFTs, Binance also has a section dedicated to that ! (Learn more about NFTs here)
| PROS | CONS |
|---|---|
| Low fees | Not available in the USA |
| +350 cryptocurrencies available | Less regulated |
| Easy sign up process | |
| Secure Asset Fund for Users (SAFU) | |
| Advanced Data Encryption |
Click here to sign up for a free binance account. Personnaly I started by putting in 50€ and dividing it on different cryptocurrencies (at the time I’d put on Bitcoin, Ethereum and Solana and made +50% .. in as little as 10 days .. !)
Crypto.com review
One of the most rapidly growing exchange platforms is Crypto.com ! This platforms is suitable for every person wanting to invest in crypto, to hold their cryptocurrencies and then to buy everyday goods with their Crypto.com Visa Card. Recently teaming up with Matt Damon, Crypto.com has a promising future !
| PROS | CONS |
|---|---|
| Low fees | Not available in the USA |
| Beginner friendly | Low customer service |
| Visa card with cash back reward | |
| Regulated platform | |
| Good security |
Click here to sign up for a free crypto.com account.
Types of cryptocurrencies
Cryptocurrencies can be divided into four main categories: Bitcoin, altcoins, stablecoins, and utility tokens.
Bitcoin is its own category because BTC maximalists (a person who believes that Bitcoin is the only cryptocurrency that matters) think that altcoins are useless and will never reach the same level of popularity or value as Bitcoin. They also believe that Bitcoin is the only cryptocurrency with a real use case.
Altcoins are cryptocurrencies that are alternatives to Bitcoin. Some examples include Ethereum, Litecoin, and Monero. These coins often have different features or purposes than Bitcoin.
For example, Ethereum is a platform that allows developers to build decentralized applications (dApps), while Litecoin is a faster and more lightweight version of Bitcoin. Monero offers more privacy than Bitcoin because it uses a technique called ring signatures to hide transaction data.
Stablecoins are cryptocurrencies that are pegged to another asset, such as the US dollar. The most popular stablecoin is Tether (USDT), which is pegged to the US dollar. USDC is another popular example of a stablecoin.
Is Crypto safe and is it a good alternative to save and/or make money?
The short answer is: yes and no. Cryptocurrencies are safe if you take the necessary precautions, such as keeping your private keys safe and storing your coins in a secure wallet. However, there are many scams in the cryptocurrency space, so you need to be careful. Click here to have a review of the 2 best wallets you can get.
How to avoid scams?
There are many ways to avoid scams in the cryptocurrency space. The most important thing is to do your own research and never invest in something you don’t understand. Another way to avoid scams is to be aware of the most common scams in this industry. These include pump-and-dump1 schemes, Ponzi2 schemes, and exit-scams3.
1Pump and dump scheme : artificially inflating the price of an owned cryptocurrency through false and misleading positive statements, to sell it at the tail end at a higher price
2Ponzi scheme: Form of fraud where you buy benefits of earlier investors with the investment of more recent investors
3Exit scams: Collecting payments while not shipping the purchased good
What can I buy today (and tomorrow?) with cryptocurrencies?
There are hundreds of stores that accept cryptocurrencies for payment. Some of the most popular brands that accept crypto are Microsoft, KFC Canada, Overstock, Home Depot, Namecheap, Starbucks, Whole Foods, and many more.
Cryptocurrencies usage for NFTs and in the Metaverse
NFTs, or non-fungible tokens, are a type of cryptocurrency that can represent anything. They are often used to represent digital art, but they can also represent other things like property rights, gaming items, and more.
The metaverse is a virtual world that is created by people. It is a place where people can interact with each other and create anything they want. The metaverse is often compared to the matrix from the movie of the same name.
Cryptocurrencies are used in the metaverse for two main purposes: to represent virtual assets and to pay for goods and services. For example, Ethereum is used to represent virtual land in Decentraland, and Bitcoin can be used to pay for goods and services in the metaverse.
We go over these two topics in more detail in our other articles, so make sure to check out our NFTs post and our Metaverse post !
Why should you start investing today?
With the growth rate and potential of the crypto industry, it’s no wonder that more and more people are interested in investing in cryptocurrencies.
If you’re new to the world of crypto, dollar-cost averaging is a good way to start. This involves investing a fixed amount of money into a cryptocurrency every month, regardless of the price. This allows you to slowly build up your portfolio and average out the price you pay for each coin. Each of the 3 platforms I presented before (Coinbase, Binance and Crypto.com are offering these kind of services !)
Another reason to start investing today is that we are still in the early stages of crypto adoption. More and more businesses are beginning to accept cryptocurrencies as payment, and this is only going to increase in the future. As adoption grows, the price of cryptocurrencies is likely to increase as well.
So, if you’re thinking about investing in crypto, there’s no better time than now !
