Cryptocurrency has caused quite a fuss over the last few years — many people who once saw it as a strange concept are now interested in obtaining some for themselves. If you’re new to the world of cryptocurrency, you may feel a bit intimidated by the complex nature of these digital assets. Luckily, there are several resources that can make it a whole lot easier to comprehend.
What is cryptocurrency?
Cryptocurrency is a particular type of digital currency that uses a technology called blockchain to manage transactions. The blockchain also records transactions on a public ledger where anyone can view them. These digital assets use top-notch cryptography to protect users and secure transactions.
Although Bitcoin was the first cryptocurrency to make headlines, there are now thousands of assets to choose from on over 30 different blockchains. Many cryptocurrencies have unique use cases, such as Brave’s Basic Attention Token, which allows businesses to pay for advertising on their browser.
Most popular cryptocurrencies
- Bitcoin: Bitcoin is the oldest and most popular cryptocurrency. Many have argued this token doesn’t have an actual use case and that it’s a burden on the environment due to the massive amount of electricity people use to mine the currency. Still, Bitcoin is one of the most actively traded cryptocurrencies currently available.
- Ethereum: Ethereum is the second most popular cryptocurrency, thanks to its robust smart contract capabilities. Smart contracts are a transaction protocol that can automatically execute transactions if specific criteria are met. For example, you can send Ether to another user but require that a certain amount of time passes before they can withdraw it. The Ethereum network is designed to allow developers to create incredibly complex smart contracts compared to those on the Bitcoin network.
- Cardano: Cardano is currently the most popular proof-of-stake cryptocurrency. Proof of work, the consensus mechanism that Ethereum and Bitcoin use, is becoming increasingly controversial due to the massive amount of computing power and electricity it requires. Alternatively, proof-of-stake cryptocurrencies let users mine crypto and validate transactions based on how many tokens they have, and use significantly less electricity.
How to buy cryptocurrency
Cryptocurrency can be purchased through cryptocurrency exchanges. Many exchanges allow you to link your bank account directly to the exchange, making it easy to buy your favorite tokens. Still, you must use a well-known exchange to avoid getting scammed. Some of the most popular cryptocurrency exchanges are Coinbase, Binance and Crypto.com. Apps that you may already use, such as Robinhood and Cash App, now allow users to purchase cryptocurrency as well.
Concepts you need to understand before buying crypto
- Blockchain: The blockchain is the digital ledger at the foundation of cryptocurrency. Some cryptocurrencies have their own blockchain, such as Ethereum and Binance, whereas others are built into already existing blockchains, such as Polygon and Basic Attention Token.
- Wallet: Wallets are where your cryptocurrency is stored. Exchanges like Coinbase and Binance have wallets built into them, but you can also download a software wallet or even use a physical hardware wallet to store your coins.
- Market cap: A coin’s market cap is the total amount of money currently invested in the asset. Understanding market cap is an essential factor in understanding a cryptocurrency’s popularity and value.
- Circulating supply: Circulating supply is essentially how many coins are in circulation for a given asset. Many cryptocurrencies announce their total circulating supply when the currency is created, but it could be years before all of the coins are released. For example, Hedera Hashgraph has a total circulating supply of 50 billion, but only 15 billion have been released.
- Liquidity: Liquidity plays a massive role in how easy it is for users to buy and sell the asset. In general, coins with high liquidity tend to have more stable prices, whereas coins with low liquidity have more volatility.
Best cryptocurrency resources
This highly rated Udemy course teaches you all about cryptocurrency terminology, technology and investment strategies. The Cryptocurrency Investment Course 2021 package includes 13.5 hours of video content and was given a five-star rating by over 8,000 users. According to Udemy, they are trusted by many well-known businesses, such as Apple, Volkswagen and Netflix.
Available at Udemy
Users praise this course for its impressive level of detail and the instructor’s professionalism. This Udemy course includes 24 hours of on-demand video and dives into specific information on various exchanges and assets. There are users who noted that some of the courses can feel repetitive, but the instructor’s use of theatrics keeps the material entertaining.
Available at Udemy
The Dummies brand is known for taking complex subjects and making them easy to understand. Cryptocurrency Investing for Dummies will help you learn how cryptocurrency markets work and how to choose the right currency. Some users felt that the author could have done a better job explaining some of the included concepts, but if you’re only seeking a basic understanding, you’re sure to get what you need.
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Cody Stewart writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.
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