You might have encountered a few words and phrases that seemed foreign when it comes to crypto. First, know the basics: crypto refers to digital currency or cryptography, encoding information so unauthorised parties can access you.
The crypto terminology might seem intimidating, but there are plenty of crypto education resources out there to help you learn about crypto.
1. Crypto Education
Learning about crypto is the first step to investing, and you mustn’t invest more than you’re willing to lose since crypto is a hazardous investment. While crypto-related education is essential, it doesn’t mean you need to become an expert. You can start learning about crypto by watching videos or listening to podcasts. Beginner courses are also great for education.
2. Crypto Mining
Mining refers to validating transactions and adding them to the blockchain, a ledger containing all crypto transactions made since inception, so you can see who bought or sold what, where, and when. As someone mines crypto, you receive fees for verifying each transaction along with new coins created from crypto mining.
What Cryptocurrencies Should You Mine?
BTC: Bitcoin is the most popular crypto because it was the first crypto and has been around for a long time. It’s also pretty expensive and difficult to mine, so many people only use BTC as a store of value (i.e., not spending it) rather than buying it to sell in the short term.
ETH: Ethereum is a crypto platform for smart contracts, agreements written in computer code that execute when conditions are met. Ether (the crypto that powers ETH) can be mined just like BTC to buy things on the Ethereum blockchain or sold for other crypto coins.
LTC: Litecoin is a crypto coin similar to BTC, but it takes a bit less time to verify transactions and has faster block generation.
3. Choose a Crypto Exchange
If you want to buy crypto, you can visit crypto exchanges online to purchase crypto coins. Some crypto exchanges sell crypto coins for U.S. dollars (USD), while others may allow you to trade these coins with other cryptocurrencies.
Once you purchase crypto on an exchange, you can withdraw it to a crypto wallet. All crypto exchanges will charge you a small fee when you make your first buy or sell, but some crypto exchanges give you the option to trade for free if you pay trading fees with their coins.
4. Open a Trading Account to Buy or Sell Crypto
If you want to buy crypto coins, you can open a crypto account with an online brokerage company.
When opening an account, you’ll be asked for your name, date of birth, mailing address, driver’s license number, phone number, bank routing information, and personal information. You’ll also have to provide crypto-specific information, like crypto addresses and wallet preferences.
Most crypto exchanges require you to submit your crypto address so they know which crypto wallet yours is. Crypto brokers charge a small fee to make trades, and they may require you to pay a minimum deposit.
Some brokers provide wallets where you can store your crypto coins, but others do not.
5. Crypto Staking
You can also earn rewards by staking crypto coins or tokens. Staking works like mining, but instead of paying for expensive computers and software to verify crypto transactions, you keep the coin in an account where it gains interest at a small percentage.
Some crypto companies raise money for their projects through initial coin offerings (ICOs), and they sell tokens that entitle you to crypto coins.
Once the crypto company gets enough funding, it can distribute crypto coins for its crypto tokens, and investors can then sell these coins back to the company.
Cryptocurrency is growing in popularity. You can attend crypto education courses, open a trading account with an online brokerage company, start a staking account, or buy crypto through exchanges. If you want to join this buzz, there are several ways for you to learn about cryptocurrency and earn crypto coins or tokens.