More than a decade has passed since the first digital coin, Bitcoin, was launched, and cryptocurrencies continue to be a hot buzzword and asset in the digital economy. Their continuous growth in both numbers and value prove to critics that they are not a fad. Instead, they hold various benefits in several ways, such as empowering you to be your own bank by buying goods and services, as well as trading them for profit.
Crypto is undoubtedly an exciting industry filled with many possibilities. Yet at the same time, understanding its blockchain technology and exploring over 6,000 digital coins circulating the market can be confusing. Thankfully, the first step to entering their world is buying digital currencies that can be done in a few following easy steps presented on this page.
Similar to fiat money, you first need to have a wallet to store your crypto. The difference, however, is that it is digital that varies into two major different types: hot and cold crypto wallets. They are also called online and offline storage, respectively. Meaning, the former is connected to the internet, whereas the latter is not and instead uses portable devices like a flash drive. With each having respective pros and cons, Bitcasino lists down their two or more subtypes to help you decide even better.
Hot wallets are hassle-free and convenient, perfect for everyday use and basic transactions. That said, while their connection to the internet allows you to access your account wherever you are and whenever you want, it also means that you are vulnerable to digital dangers like technical errors and mischiefs. As such, you need commendable hot wallets to prevent such problems, but first, take a look further below for their subtypes.
As mentioned above, cold wallets are portable devices that only become online when used for transactions. Their secure offline storage feature makes them ideal for business owners, long-term crypto traders, or as what the industry likes to call them, hodlers (users who ‘hold on for dear life’). Here are their two subtypes:
Once done sifting through the many, many hot and cold wallets available in the market, another platform you need to meticulously find is a crypto exchange. It is a digital marketplace where owners can buy and sell digital currencies, and even convert fiat money into other assets according to the market value.
While crypto exchanges are like traditional stock exchanges — market makers that take bid-ask spreads as their extra charges for every transaction — they vary into three kinds. These are centralised (CEX), decentralised (DEX), and hybrids, each of which holds significant pros and cons depending on your preferred services.
To further protect yourself from several digital dangers, you need to rely on platforms that have the six following essential qualities:
Licensed crypto wallets and exchanges have successfully met federal regulatory requirements, including KYC (know your customer). Otherwise known as ‘know your client’, it is the process of verifying your identity by either submitting a copy of your passport/driver’s license or uploading a selfie to further prove your appearance matches your documents.
Before buying any crypto, you must first ensure that you have funds in your account. As said before, many exchanges allow users to convert fiat money into their preferred coins. Now, how it is done varies from one marketplace to another, possibly ranging from linking a bank account, authorising a wire transfer, or settling payment with a debit/credit card.
Now that the money is available in your account, you are ready to finally place your crypto order. The problem, however, is that there are more than 6,000 digital currencies circulating today in the market.
To get you started, listed as follows are the top 10 digital currencies in October 2021 based on market cap.
Before diving into your first trade or transfer, it's essential to get a grip on the lingo of the crypto world. Familiarizing yourself with these key terms will enhance your interactions with digital assets and boost your confidence as you explore various tools, communities, and platforms.
Think of a wallet as your digital vault for cryptocurrencies. It can come in two forms: software-based (like online or mobile apps) or hardware-based (physical devices that keep your private keys safe offline). Remember, wallets don't actually hold the coins; they store the pairs of keys that give you control over those coins on the blockchain.
In the crypto realm, a transaction is all about moving assets from one address to another on a blockchain network. Every single transaction is recorded publicly and permanently on the blockchain, capturing details like the amount, timestamp, sender and recipient addresses, and a unique transaction ID.
The blockchain is a decentralized, distributed ledger that keeps track of all transactions across a network. Each block in the chain contains a list of transactions and is cryptographically linked to the one before it, creating a secure chain. For example, Bitcoin's blockchain adds a new block approximately every 10 minutes, verifying and recording the latest transactions.
Tokenomics is a blend of "token" and "economics." It explains how a crypto asset is structured and how it behaves economically, covering aspects like supply mechanisms, distribution models, incentives, and use cases. Take Bitcoin, for instance; it has a capped supply of 21 million coins, which introduces a built-in scarcity that influences its value over time.
A public key acts like an address-you can share it to receive crypto. On the other hand, a private key is your secret digital signature that you use to sign transactions and access your assets. If you lose your private key, you lose access to your crypto, as no one else can retrieve or replace it. These keys are typically stored in your wallet.
Gas fees are the costs that users pay to get their transactions processed and validated on a blockchain network. Take Ethereum, for example; here, gas is measured in "gwei," and the price can fluctuate based on how busy the network is. More complicated transactions, like minting NFTs or engaging with smart contracts, usually come with higher gas fees.
Volatility is all about how quickly the price of a crypto asset can change. Cryptocurrencies are known for their wild price swings compared to traditional assets. For instance, Bitcoin experienced daily price fluctuations of over 5% more than a third of the time in 2022, according to Coin Metrics. This kind of volatility brings both opportunities and risks, shaping the strategies that traders and investors use.
Now that you've got this terminology down, diving into whitepapers or exploring exchange platforms should feel a lot easier. Take a moment-how many of these terms clicked for you right away? The more comfortable you get with this language, the easier it will be to navigate the world of crypto.
Before we let you go and explore more of the crypto market, Bitcasino leaves you 10 important tips to remember:
Every cryptocurrency transaction is built on a blockchain. This technology acts like a distributed digital ledger, keeping track of each transaction across a network of computers. Instead of relying on a single database controlled by one organization, blockchains share data among participants, known as nodes, who work together to maintain a synchronized and transparent record of every event.
Information on the blockchain is organized into blocks, which are linked together in chronological order, forming a continuous chain. Each block holds a collection of transactions, a timestamp, and a cryptographic reference to the previous block. Once a block is added to the chain, its contents can't be changed without the consensus of the majority of the network-making it nearly impossible to manipulate.
In traditional systems, we often depend on banks or payment processors to verify and approve transactions. But with blockchain, that middleman is eliminated. Instead, transactions are confirmed through consensus mechanisms, with two of the most popular being:
These consensus methods empower decentralized networks to agree on the legitimacy of new transactions without needing a central authority. No single person can dictate what gets added; instead, decisions are made collectively, resulting in a shared record that's both transparent and resistant to tampering.
Blockchains establish a permanent record. Anyone can look up the history of a public blockchain like Bitcoin or Ethereum, and once a block is confirmed, it can't be deleted or altered. This immutability fosters trust. Data isn't safeguarded by secrecy but by openness and cryptographic security.
Trust doesn't stem from who runs the system, but from how it operates. Curious if a Bitcoin payment actually went through? You don't need a bank statement for that. Just check the blockchain. This ability to independently verify transactions is changing the way people exchange value, enforce contracts, and prove ownership in our digital age.
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