CRYPTO CURRENCY BASICS
What is a digital currency?
- A form of money that is backed digitally via a technology such as Block-chain, Tangle or decentralized network. Decentralized is simply a network relying on all the users that make up the network rather than just a central source. A bank is a perfect example of a centralized network.
How is a digital currency created?
- Each currency’s backed technology is different. Some technologies allow users to “mine” the currency by lending their resources to the currencies network. CPU, Graphics, Hard Drive Storage, Etc. are all resources users can share to the currencies network. When users share enough of their resources they are rewarded some of the currency.
How is it different from printed money?
- Printed money is backed by a government.
What is a Bitcoin?
- Bitcoin is one type of Crypto Currency. It uses the blockchain which is its backed technology. People lend resources to the blockchain network which allow them to “mine” the coins. Once coins are mined they can be sent or received over the blockchain network. There are only a certain amount of coins that can possibly be mined. Bitcoin is leading the way for all Crypto Currencies, for more information on Bitcoin click Here.
What are Alt coins?
- The term “Alt Coin” simply refers to any alternative Crypto Currency other than Bitcoin. There are over 1,000 different types of Crypto Currency.
What are Crypto wallets?
- Crypto Wallets are where you store your digital currency. Each currency has its own type of wallet to store the currency. You can access wallets by signing up for them on websites or by downloading the software for the wallet on to your own computer.
What is an Exchange?
- An Exchange is where people can Sell and Buy Crypto Currency. All exchanges offer different Crypto Currencies to Sell or Buy. A lot of these exchanges have built in Crypto Wallets so when you Sell or Buy your currencies are stored right on the exchange.
What are popular Exchanges?
- The most popular exchange in the United States is Coinbase. The second most popular exchange for the United States citizens is Binance. There are many more exchanges but we currently only have experience with the 2 listed below.
How do I use an exchange?
- Visit the website of the exchange you wish to use and sign up for an account. Most exchanges require your account to be verified, which consists of providing personal identification information such as a drivers license or passport. Once verified you will be able to Buy and Sell Crypto Currency. Some exchanges require you to send Crypto Currency to the exchange before you can Buy or Sell.
What is Buying and Selling?
- Once you have a currency loaded onto your exchange account or have it linked to a source of money you can begin Buying or Selling Crypto Currency. In the exchange there will be the option to place “Buy” or “Sell” requests of a specific amount of Crypto Currency. Once your request is placed it will take some time for it to be completed. This process can be nearly instant or in some cases take a longer period of time. Once an amount of currency is purchased it will be stored in its wallet.
Are there fees?
- Most exchanges will charge you fees when you Buy, Sell, or Send Crypto Currency. All exchanges are different.
How do I get $USD on an exchange?
- Linking a bank account, credit card, or in some cases such as the exchange Binance they don’t accept $USD and use Bitcoin as the medium of exchange. If the exchange doesn’t accept $USD you can purchase Bitcoin with an exchange such as Coinbase then send the Bitcoin to the Binance like exchange.
What is cold storage?
- Cold Storage simply refers to storing your Crypto Currency on your own computer that is removed from the internet. This is less convenient, but much more secure and protected from hackers or scammers. Storing your currency on an exchange or online wallet is easier to be stolen if the service was to be hacked or compromised.
Buy and Hold
- You purchase a Crypto Currency and you hold it until it reaches a specific profit point, then you sell. This strategy requires the least amount of attention.
- You spend a large amount of time tracking and analyzing the market. Placing trade frequently at specific increases in the value of your Crypto Currency.
125% Cash Out
- Purchase Crypto Currency, Reach a 125% profit margin or higher, sell just enough of the original investment to pay off what you have invested. Leave the excess Crypto Currency in the market to grow risky free or sell it and reinvest it else where in life.
Currency or Technology?
- Crypto Currency is currently the name of digital technology that holds value. “Currency” may be the wrong word for these technologies as we go forward. The real value in these technologies is not the ability to buy goods like cash but more so what the technology brings to the world as a whole. Stellar Coin and others allow people to convert one currency in the world to another with little to no fee where as now you could be charged hundreds of dollars to accomplish the same thing. Bitshare Coin allows a large amount of computers to all work together to act as a cloud technology similar to Apples iCloud. Except users would be securely storing their data on computers around the world rather than the greedy hands of big corporations. Every Crypto Coin has it’s own perks and Disadvantages, we are entering a new world full of technological advances that will impact the world and change it forever.