What Is Cryptocurrency: A Guide for Beginners

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What Is Cryptocurrency: A Guide for Beginners

It’s hard not to hear about cryptocurrency everywhere you go these days, but do you really understand what crypto is and how it works? This article will explain all the basics in easy-to-understand terms, for complete cryptocurrency beginners.

What Is Cryptocurrency?

Cryptocurrency is a digital currency that is typically built using blockchain technology. Unlike traditional currencies, cryptocurrencies are not issued or regulated by central authorities, such as governments or banks.

How Did Cryptocurrency Come About?

Cryptocurrency first came about after the 2007-2008 financial crisis. It was created as an alternative to the world’s traditional currency, with the goal of creating a currency that wasn’t dependent on banks and governments for value.

What Is Mining Cryptocurrency?

Mining in the name given to the process by which new cryptocurrency is created and enters the market. Crypto miners compete against one another using large amounts of computer processing power to validate crypto transactions and earn crypto coins doing so.

How Does Cryptocurrency Work?

Cryptocurrency is bought and sold via various different exchange platforms, much like national currencies, stocks, and other investment assets. You can use crypto for buying and selling things, just like real money. Like other types of assets, the value of cryptocurrency rises and falls, and different cryptocurrencies have different values.

Centralized vs. Decentralized Networks

Cryptocurrency is a decentralized currency, meaning that it does not rely on a single network or entity to control it. Crypto is built on top of decentralized blockchain technology, which means that the technology behind it is distributed across a wide range of networks and computers. This is what allows cryptocurrencies to exist outside of traditional currency frameworks created by governments and financial institutions.

What Are the Main Different Types of Cryptocurrency?

Bitcoin and Altcoin (e.g., Ethereum)

Bitcoin was the first major cryptocurrency, and it’s still one of the most popular among crypto investors. After Bitcoin’s huge success, other types of Altcoins were invented in the same style. Two of the most popular Bitcoin alternatives are Ethereum and Tether.

Tokens

Crypto tokens are another popular type of cryptocurrency that represents a specific asset. For example, blockchain-powered startups are issuing their own tokens that you can buy to own a stake in them, just like how stocks work.

What Is PI Cryptocurrency?

PI cryptocurrency is a relatively new type of cryptocurrency that runs on the Pi network. It is touted as being the first crypto that you can mine from your phone via a mobile app.

Are Cryptocurrencies Legal?

The legality of cryptocurrencies varies across the world. At the time of writing, cryptocurrency is legal in much of the world but has been banned in 9 countries, including China. Since it is decentralized, it is hard to regulate cryptocurrency, and it still inhabits somewhat of a legal gray area in many countries.

Why Are Cryptocurrencies So Popular?

• Doesn’t rely on governments and banks for value
• The value of many cryptocurrencies is going up
• May become the money of the future
• An alternative investment to stocks and other assets
• Can be used for a growing number of day-to-day transactions

What Is Cryptocurrency Used For, If It Isn’t Physical Money?

Even though it’s not physical money, cryptocurrency functions like traditional currency. Other than buying and selling it purely for investment purposes, you can use cryptocurrency to buy and sell regular things.

Though crypto is still not an accepted form of currency everywhere, more and more companies are starting to offer goods and services in exchange for cryptocurrency payments. For example, you can buy food using crypto at some restaurants and fast-food chains, including Subway. You can even buy a Tesla with crypto now!

The Newest Cryptocurrencies of 2022: Both Fake and Real

Lucky Block

Lucky Block is a new cryptocurrency described as a crypto lottery. However, as with many new cryptocurrencies, it’s hard to verify information about the company and its technology, so investing in this crypto is truly a gamble.

Shiba Inu

Shiba Inu is a crypto that’s been making a lot of headlines lately because it’s what’s known as a “meme coin,” or a coin created as a bit of a joke. However, it is now considered a legitimate cryptocurrency by many. You can buy and sell it just like major cryptocurrencies, but it may be much more volatile than more established crypto brands, such as Bitcoin.

Squid Crypto

Squid Crypto was a cryptocurrency inspired by the vastly popular Squid Game series, but it turned out to be a complete scam. In this case, the scammers operated what is known as a “rug pull” scam, meaning they built up a bunch of hype, sold a bunch of Squid Crypto to investors, then disappeared with the money and didn’t let investors resell their crypto.

What Is The Safest Platform To Buy Cryptocurrencies?

Coinbase is one of the most popular crypto exchange platforms. Another one that’s considered secure is Binance. Though it may be safe to buy and sell crypto on these platforms, it’s important to know that it is still possible to fall victim to cryptocurrency scams. This is because the platforms do not have control over the legitimacy of the currencies that are traded on them.

How Do I Protect Myself From Cryptocurrency Scams?

To protect yourself and your wallet from crypto scams, it’s very important to do your research before committing to buying any cryptocurrency. There are thousands of different types of crypto available these days, and there are lots of scammers taking advantage of naive investors.

When you’re considering buying cryptocurrency, make sure to research the company thoroughly. Look up the people involved and read opinions and reviews from other people who have invested in the crypto already to make sure it’s not a scam. Also, be very wary of any promises that sound too good to be true, because they probably are.

If you’ve fallen victim to a cryptocurrency scam, contact Payback today. We will do everything we can to help you get your money back.