The Beginners Guide To Crypto

Crypto-Lingo

In this section we will learn some of the most important concepts to understand the cryptocurrency technology.

Introduction

Cryptocurrency is a totally new type of technology. It is so useful that it is growing at an amazing speed. You won't be able to ignore this for long. Not knowing how does it work may put you in great disadvantage. And moreover, it may expose you to new dangers and scams.

At the time of this writing there are thousands of cryptocurrencies, and the literature, videos, webinars, etc. About it is enough to discourage most people from even trying to learn how does it work.

That is why we have prepared this introduction, as a step by step guide that provides you a hands on experience to discover by yourself the wonders of this new technology.

First some encouraging ideas:

1) Even though there are thousands of cryptocurrencies, if you have a basic understanding of Bitcoin and Ethereum you will have the tools to understand any other crypto project.

2) The same way you don't need to be an engineer to operate a computer or a car, you don't need to understand everything about cryptocurrencies. Using them will be as easy as using your phone.

Second, an encouraging warning:

With every great power comes a great responsibility.

Nowhere else is this more true than in crypto.

Crypto puts in your hands the power to access markets where billions of dollars fly around. Imagine somebody gave you a free entrance ticket to the stock-market, or a pool full of sharks!

Most people trading in these markets loose money. It is easy to be lured by the dream of making lots of money in one lucky trade, which you may, but making consistent profits in the crypto or stock market is an art of its own.

But you can adopt low risk strategies that will create value over time.

Knowing more about the factors affecting a cryptocurrency's price will surely help a lot.

But even in your daily life there are great responsibilities. If you loose your crypto, or send them to the wrong place, nobody in the world can help you recovering them.

Therefore even though you don't need to understand integrated chips and engines to operate a car or phone, a basic understanding of the way they work is very important because of safety reasons, and to maximize the benefits you can get from this technology.

Basic Fundamental Principles

We mention that cryptocurrency is a totally new technology. But money is nothing new, and most of the money we use everyday with credit and debit cards is digital, so what is new about crypto?

Two classes of cryptocurrency

Most cryptocurrencies fall on one of two fundamental types represented by Bitcoin and Ethereum.

Bitcoin was designed to be money.

Ethereum was designed to be a decentralized virtual computer.

Here in these words is summarized all we need to know about cryptocurrency! But we will spend some time understanding in depth the meaning of these sentences. First let us talk about money.

Two classes of Money

Bitcoin was designed to be money, but there are fundamentally two types of money represented by Gold and Fiat.

The value and the price of gold is determined by the balance of supply and demand, it's value is determined by the cost of production, the handling of the asset, transportation, storage, checking its purity, etc. And the demand it has on the markets.

Fiat is a form of money created by banks and adopted by a government to run a country

Bitcoin was designed to be Digital Cash

We have to understand this to see how groundbreaking this technology is.