What is Cryptocurrency?The aim of this site is to give you the basics to get you started and share numerous links to other sites to help you learn all you need to know.
What is Cryptocurrency?
Cryptocurrency or digital currency such as Bitcoin is an encrypted medium of exchange based on blockchain technology used to regulate the generation of units or coins and verify the transfer of funds. It is a peer to peer payment system that is independent of any government or central bank. Bitcoin has been called the digital Gold as it can be used as a store of wealth and can also be used as a method of payment, currently beyond the restriction and confiscation of governments. Cryptocurrencies are located on the Blockchain which is a digital ledger of all transactions and holdings in all wallets, the blockchain is located on hundreds or thousands of computers worldwide and therefore cryptocurrency is not located in any specific country, it is everywhere and nowhere specifically.
Cryptocurrency is a relatively new technology and as with all financial investments or speculations, you should not ‘risk’ more than you are prepared to lose, the total Cryptocurrency market cap is approx. $100 billion which is peanuts in the financial world and therefore prices are highly volatile. For perspective here are some approximate figures from between 2014 – 2016, Global stock markets market cap $65.6 Trillion, Global bonds market cap $100 Trillion, Global derivatives market cap $1.3 Quadrillion! Some say these markets are being manipulated by central banks and are due a massive correction and/or a total global financial crash, which is why I am moving some money into Cryptocurrency. Disclaimer
Cryptocurrency of any value can be transferred peer to peer, at any time to anyone, almost instantly at almost no cost. This is why big banks and governments generally do not like the idea and why you will often hear stories on mainstream media about digital currencies being used by terrorists or drug dealers because it is anonymous and therefore ideal for use in illegal trades and money laundering. The fact of the matter is, most digital currencies are not anonymous as such, all transactions can actually be traced via the blockchain and the blockchain cannot be deleted or altered. There are a few cryptocurrencies that are more private than Bitcoin but we’ll cover some of those elsewhere on the site.
The first thing you’re going to need is a wallet to hold your Cryptocurrency, there are numerous wallets available depending on the coin or token you want to hold. As you’re probably new to cryptocurrency I will recommend the best place to start based on my experience when I first got interested in digital currency, then from there I will provide links and information which will enable you to swap various coins such as Bitcoin, Ether & Litecoin for some of the lesser known coins and tokens. You will also find out where you can trade cryptocurrency much like you would trade fiat currencies ie. Sterling, Dollar, Yuan, Euro etc, on the Forex, should you have the risk appetite for it. I will also provide links to sites listing all the coins and tokens with upto date prices, YouTube videos that I’ve found very informative and which I think you will too.
Time to start…
I am going to recommend you start with a company called Coinbase because I’ve used them myself for various sizes of transaction and have never had a problem, other than downtime of their site due to traffic when buying volumes are high but that’s a separate matter and they are working to improve and scale their systems as the whole cryptocurrency interest increases and more people buy into it… That aside, In my experience they are trustworthy and I use them. So, first off, you need to visit www.coinbase.com (This link will take you directly to the correct site and if you sign up using this link you will receive $10 Euro free to get you started, I will also receive a small commission so thank you for helping to fund this site). Once registered you can also download the app to your smartphone (click your OS to go to the app store) if you have Android or Apple simply follow the instructions and you’ll be buying your first Ether, Bitcoin or Litecoin in no time! There are various levels of identification required depending on the amount you will be buying, this can be and was for me, a very annoying and slow process which may have you pulling your hair out at times, but bear with it as it will eventually workout.
Okay, I’ll assume you’ve registered and have access to your account. As you can see there are a couple of ways to fund your account, either by means of a bank transfer or paying using your bank card, I won’t include commission and charges here as they may change but simply put, the charges are higher when using your card and you can only buy smaller quantities but it’s not cost effective to transfer small amounts as your bank may charge you if it means you are doing an international bank transfer from say, Sterling GBP to your Coinbase Euro account. You will have to decide which option best suits your budget, either way you will have a limit to how much you can deposit in one week.
Protect your Cryptocurrency with an offline wallet
The ledger Nano S stores your Bitcoin, Ether and alt coins and secures digital payments, it connects to any computer via a USB cable. It has an OLED display to double check and confirm each transaction using the side buttons.
Buy your Ledger wallet at ledgerwallet.com