Despite the fact that Bitcoin was launched in 2009, it wasn’t until later that you couldn’t turn on the news or surf the internet without hearing about cryptocurrencies.
I received so many inquiries from my readers and listeners to my national radio show that I decided to write an e-book about cryptocurrency to assist them. I explain what digital money is, how to mine it, and how to get started trading. To order a copy from Amazon, tap or click here.
Unfortunately, I hear from people who have been duped by one or more crypto scams. Criminals are waiting where there is money. Click or tap to learn about five ingenious crypto scams that are currently circulating, as well as how to keep safe.
Before we begin, keep in mind that this is not financial advice. The cryptocurrency market is volatile, and you should never invest money you can’t afford to lose. Let’s look at some of the most commonly used lingoes:
Every bitcoin transaction is performed, confirmed, and stored on a blockchain, which is a virtual ledger. Another record is generated on this virtual ledger when someone buys or sells cryptocurrency.
Consider the blockchain to be a train full of boxcars. A new boxcar is added to the train every time a cryptocurrency transaction is done.
The blockchain is a distributed ledger. This means it isn’t kept on a single machine or even on a single network. The blockchain, on the other hand, is stored on computers all over the world that are connected to the internet.
People and businesses use their own computers’ processing power on a decentralized peer-to-peer network to help validate each transaction that is uploaded to the blockchain. Each transaction is timestamped and encrypted separately, and thus cannot be reversed or altered. Yes, you read that correctly: cryptocurrency transactions are irreversible.
Would you prefer to listen rather than read? To listen to an episode of my podcast, Kim Komando Explains, covering all things crypto, tap or click here. You’ll also hear from a bitcoin miner firsthand.
“I thought a Fiat was a car,” you might be thinking. In crypto-land, no. Government-issued money is known as fiat money. If you’re in the United States, you’re talking about the dollar.
Cryptocurrency, on the other hand, is a type of digital currency.
Governments or any other standard used with traditional currency do not back cryptocurrencies. The amount you own is represented by each “token.”
The current market value determines how much each token is worth. It goes up one day and down the next. Price swings in cryptocurrencies can be considerably faster and more intense — both positive and negative. CoinMarketCap is a useful tool for checking current prices.
This is a simple one to remember. Any digital money that isn’t Bitcoin is known as an altcoin. There are thousands of cryptocurrencies, and new ones are constantly being introduced.
These are the five currencies having the largest market capitalizations at the time of writing. (This is the circulating supply’s overall market worth.) Because cryptocurrency changes so quickly, this list may have already changed by the time you read it.
• Bitcoin is a cryptocurrency.
• Ethereum is a cryptocurrency.
• Binance Coin is a cryptocurrency.
• Use the tether
• Solana is a kind of plant.
To purchase cryptocurrency, you must first go through an exchange. Consider an exchange to be a cryptocurrency middleman. It’s an online service that lets you swap fiat currency for cryptocurrency or vice versa.
A crypto exchange acts as a brokerage if you’re accustomed to traditional investment. You can make a deposit via a bank transfer, a wire transfer, a debit card, and other common methods. For the most part, you can anticipate paying fees.
You can also buy cryptocurrency via apps like Venmo, Robinhood, or Cash App, which you may already be using.
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A cryptocurrency wallet, in its most basic form, is an app or physical storage device that allows you to store and retrieve digital currency. You can store various cryptocurrencies in a wallet, so you’re not confined to only Bitcoin.
It’s vital to remember that whether you use an app or a physical wallet, the currency isn’t held there. Wallets, on the other hand, keep track of where your money is on the blockchain.
Wallets are divided into two types: hot and cold. By definition, a hot wallet is linked to the internet. A cold wallet, or one that isn’t linked to the internet, is the most secure way to store your cryptocurrency.
Physical wallets exist in a variety of shapes and sizes, but they are often custom-designed USB devices that store your money for later usage. Physical wallets offer the highest security against hackers.
The Ledger Nano X and Trezor Model One are two popular cold wallets. I like the Ledger Nano X over the other two since it supports 23 different types of cryptocurrencies and has more functionality.
If you’re concerned about privacy, the browser you use is important. I’ve put them in order for you here. Is your favorite on the list?
You’ve probably heard of this word in relation to Bitcoin, which is generated by mining. Solving complicated math problems is how computers mine coins. The faster a computer can “think,” the more powerful it is.
Now, if your computer solves the problem the fastest, you win one unit of whatever cryptocurrency you’re mining.
While a few cryptocurrencies have a limitless supply, most have a limit. The maximum for Bitcoin is 21 million. In 2140 or sooner, the last coin will be mined.
Here’s another easy one for you. Decentralized finance, or Defi, is a condensed version of the term. Financial transactions take place without the involvement of a “middleman,” such as the government, a bank, or another financial organization.
Still, having trouble grasping traditional internet banking? If you follow a few simple guidelines, you’ll be OK. For banking security 101, tap or click.
Nonfungible tokens are something you’ve probably heard of. “This digital thing is one of a kind and irreplaceable,” as the phrase goes. It covers anything from online artwork to songs, viral videos, articles, text logos, and animated GIFs.
Some people collect old automobiles, fine wines, well-known artwork, and baseball cards. Any digital item can now be transformed into a collectible. They’re also used as status insignia on the internet. Take a look at Jimmy Fallon’s Twitter profile photo as an example.
Only Bitcoin can be used to purchase an NFT. An NFT can be purchased through an auction platform, a secondary market, or by taking part in a mint. You might be wondering what that is.
Minting is the process of storing a file, such as a JPEG or GIF, in a blockchain. An NFT can be sold or traded once it has been minted. When you take part in a mint, you are the first person to purchase a piece from its author. You have the option to keep it, sell it, or exchange it.
The author specifies the royalties they will receive from future sales throughout the minting process. This serves as a commission if the piece is sold in the future, and it’s a key selling point for artists who want to go digital. If you sell an NFT on a secondary market, it will very certainly receive a cut of the sale.
This is a word you may come across on social networking. “Hold on for dear life” is what HODL stands for. Some think it started as a misspelling of the term “hold” on a Bitcoin forum, but it’s now common parlance.
The concept is simple: if you believe a project or currency will appreciate in value, simply “hold” during market downturns.
Do you want to go even deeper? Get a copy of “Cryptocurrency 101.” It’s my easy-to-follow guide to safely purchasing, selling, and spending digital money.
Whether you use Netflix, Hulu, Amazon Prime, Disney+, or Apple TV, your favorite applications are almost certainly following you around. In this episode, you’ll learn about the hidden dangers of cutting the cord.
On Apple, Google Podcasts, or your preferred podcast player, listen to my podcast “Kim Komando Explains.”
The podcast can be found here or wherever you get your podcasts. Simply look up my surname, “Komando.”
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