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*Compared to major competitors. Terms and conditions apply. This is not investment advice or an investment recommendation. NFTs are shown for illustrative purposes and the types of NFTs available may vary. Cryptocurrencies, including NFTs are highly volatile, subject to significant price risk, and may not be suitable for you.
Cryptocurrency is an interesting topic. According to recent research, approximately 81 million people created Bitcoin wallets in 2022. Also, 89% of Americans have now at least heard of Bitcoin.
However, despite that, 24% of Americans don't know how cryptocurrencies work. Therefore, if you're ready to get into crypto but don't know where to start, you're not alone.
As you'll find out, trading crypto isn't rocket science. People of all ages, income backgrounds, and professionals are already doing it. This crypto 101 article will give you the complete rundown of how crypto works and how you can start trading.
The first step in trading cryptocurrency is learning the difference between it and blockchain.
Cryptocurrency is a digital asset that uses cryptography to secure its transactions. Cryptocurrencies are decentralized, which means they don't rely on third parties such as banks or governments to oversee or validate transactions.
The most well-known cryptocurrency is Bitcoin, but there are thousands of other types of cryptocurrencies. These are often referred to as altcoins. Ethereum, Litecoin, and Bitcoin Cash are some examples of altcoins.
Blockchain is the technology that powers all cryptocurrencies. It's a digital ledger that records all crypto transactions in chronological order. This means that anyone can view all past transaction history at any time.
Each blockchain has its own unique features and characteristics. For example, Ethereum focuses on smart contracts while Bitcoin is used as a store of value.
There are four main types of blockchains:
This information is helpful in understanding how a particular coin works. Different types of blockchains can influence how cryptocurrencies work, especially for trading purposes.
Now that you know the difference between blockchains and cryptocurrencies, it's time to learn about the most popular cryptocurrency: Bitcoin. Bitcoin is a decentralized cryptocurrency that was created in 2009 by the entity Satoshi Nakamoto. It's the first and most well-known cryptocurrency. It was also the genesis of blockchain technology as a whole.
Bitcoin is often referred to as digital gold because of its limited supply and lack of central authority make it a strong store of value that is outside of human manipulation. The total supply of Bitcoin is 21 million coins. Currently, there are almost 19 million Bitcoins in circulation.
Bitcoin has seen widespread adoption as a store of value. This is because Bitcoin has a limited supply which makes it scarce like gold. More recently, bitcoin has also been adopted for uses like cross-border payments, and has even been made legal tender in one country (El Salvador).
Ethereum is a decentralized platform operating on smart contracts. These are applications that run exactly as programmed without a centralized entity.
Ethereum was created in 2015 by Vitalik Buterin and a team of inventors. It's the second most well-known cryptocurrency after Bitcoin. Ethereum's native currency is called Ether, but it also has a wide range of other tokens that run on its blockchain.
Ethereum’s smart contract tools have enabled it to underpin some of the crypto industry’s most exciting developments, including Decentralized Finance (DeFi) and NFTs.
Ethereum increasingly has competition from other “layer 1” smart contract platforms, such as Solana, Avalanche, and Polkadot.
Cryptocurrencies like bitcoin and ether are “fungible” because every BTC is the same as every other BTC, and every ETH is the same as every other ETH. Non-fungible tokens (NFTs) are a type of token that represents a unique digital asset that cannot be substituted for any other token. They're created on top of existing blockchain platforms such as Ethereum or Solana.
NFTs are often used to represent digital art, collectibles, and other virtual items. However, they can also be used to represent an ownership certificate of physical assets such as real estate or works of art.
Cryptocurrencies use encryption to secure their transactions. This is done by using a public and private key.
The public key is like your home address. It's what you give to someone so they can send you cryptocurrency. The private key is like your password. It's what you use to access your cryptocurrency.
Cryptocurrencies are stored in a digital wallet. This can be a software or hardware wallet. A software wallet is like an app that you install on your computer or phone. A hardware wallet is a physical device that stores your cryptocurrencies offline in cold (aka not connected to the internet) storage.
If you're interested in trading crypto, there are a few things you need to do.
First, you need to choose a good cryptocurrency exchange. This is where you'll buy and sell your cryptocurrencies. Once you've chosen an exchange, you'll need to create an account and verify your identity. This process can take a few days or a couple of minutes, depending on the account.
Once your account is verified, you can deposit money into it and start buying cryptocurrencies.
Finally, store your cryptocurrencies in a safe place such as a software or hardware wallet. This will help you keep them secure and protect them from malicious people.
When you get the hang of it, understanding crypto will become a breeze. This crypto 101 article should give you all the information you need to begin trading.
All you need is an exchange to start buying crypto. That’s where FTX comes in. Create an account today to get started trading in crypto.