A Beginner's Guide to Cryptocurrency
What is cryptocurrency?
Why do you people use crypto?
What are the main types of crypto?
10 popular cryptocurrencies
- Bitcoin. The original and most popular crypto, Bitcoin was created in 2009 by an anonymous person using the name Satoshi Nakamoto. Read a full review on Bitcoin.
- Bitcoin Cash. An offshoot of Bitcoin created by a “hard fork” (forced split in the blockchain), Bitcoin Cash allows for faster transacting and lower fees.
- Bitcoin SV. A hard fork in the Bitcoin Cash blockchain created Bitcoin Satoshi’s Vision (BSV) that aims to be more like the original Bitcoin in its structure and usage.
- Ethereum. The second-most-popular crypto, Ethereum works like Bitcoin but is more focused on decentralizing data and not just monetary value. Read a full review on Ethereum.
- Ethereum Classic. This is the original version of Ethereum, out of which Ethereum was created with a hard fork in 2016.
- Litecoin. Though very similar to Bitcoin, Litecoin is faster and cheaper to use.
- Zcash. Zcash allows transactions to occur without the transactors or the amount being made public.
- Ripple. Ripple is a platform whose cryptocurrency is called XRP, which institutions can use on a network called RippleNet to transact globally.
- Stellar Lumen. Created by the same person as Ripple, Stellar Lumen is similar to Ripple but is focused on helping individuals transact.
- Dogecoin. Created as a satire of Bitcoin, Dogecoin originally just sought laughs but is starting to get real buyers, like famous innovator Elon Musk. Read a full review on Dogecoin.
How to buy crypto
What are the risks in cryptocurrency?
How does crypto stack up?
Pros and cons of crypto
- Easy transactions: Transacting with cryptocurrency is simple once you’ve gotten yourself set up with a digital wallet and found a reliable crypto exchange to use.
- High upside potential. The cryptocurrency market is hot, and wild swings in value mean there’s a possibility you can get a very high return very quickly from this investment.
- Autonomy: Users of cryptocurrencies often find it an advantage to have autonomy in managing their currency without the interference of intermediaries like banks or governments.
- No or low fees: While you do typically pay some fees when transacting with crypto, you are able to do away with those pesky banking fees and typically pay very low fees for transacting internationally.
- Relative anonymity: Due to the nature of blockchain, many cryptocurrency transactions are posted to a public ledger — a list of transactions that might include information such as the amount and the sender’s and recipient’s wallet addresses. While it’s technically possible to figure out the identities of the transactors from this ledger, they are much more difficult to trace than with many traditional forms of transaction, such as credit and debit cards.
- High risk: Since cryptocurrencies are unregulated, you’ll have no recourse if you lose value due to market volatility, theft, or other eventuality.
- High downside potential: The fluctuations in these currencies mean that you can lose all your money in the blink of an eye, and it’s anybody’s guess whether and when the value will swing back up.
- No promises: With reports of massive payoffs circulating, a crypto investment can seem like a sure thing, but anyone who promises a guaranteed return is a fraud.
- Irreversible payments: Once you’ve hit the button to transact with crypto, your fate is sealed. There’s no reversing the payment, even if you are dissatisfied with the outcome.
- Legal vulnerability: When transacting with crypto, you don’t have the same legal protections as when you pay with the usual legal tender. There’s no one to appeal to if you want to dispute a purchase or report a scam.
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