Cryptocurrency prices are rising again. So I decided to make broader cryptocurrencies for beginners guide or review of what they are, why they even exist, what is their purpose, which are the most popular and widespread cryptocurrencies, how to trade with them and of course, what do the basic terms mean.
Cryptocurrencies for beginners – Terminology
Let’s start with some crypto lingo. The crypto trading world is full of insider terminology that is interesting, if not necessary, when, following crypto conversations on social media, news media, Twitter or elsewhere. These are some of the most curious terms.
SATOSHI – the smallest part of Bitcoin and a lot of other cryptocurrencies. It is 0.00000001 of Bitcoin.
ALTCOIN – all coins that are not Bitcoin
FOMO – An acronym that stands for “Fear Of Missing Out”. Cryptocurrency is very volatile and heavily affected by the news, and this is one of the reasons people feel that they have missed an opportunity all the time.
HODL – It started when someone mistyped “hold” in a drunk state. But this current acronym got adopted by the cryptocurrency world and now often means “Hold On for Dear Life”.
MOONING – In crypto this means that the price goes up astronomically resulting in you owning a new Lambo.
LAMBO – Well, you might have guessed this one already: Lamborghini. Stands also exemplary for all the amazing, life-changing things crypto traders want to buy with their crypto profits.
SHILL – a person “shilling” a certain token would mean that he is most likely holding such token and trying to make more people buy the token by giving positive news about it, whether true or not.
WHALE – a whale is an investor holding big amounts of a certain coin or token. This means that if he PUMPS (that is, buys and pushes the price up) or DUMPS (meaning selling the coin) it will go up by huge amounts. This results in people getting affected by FOMO and just start buying whatever comes to hand. Instead of doing research and buying cryptocurrencies for beginners. More on that bellow.
Am I forgetting any funny one? Comment below this article.
Origins and meaning of Bitcoin (BTC) explained in simple terms
The first cryptocurrency that ever existed was Bitcoin. Renown Bitcoin expert Andreas M. Antonopoulos really good explains the whole Bitcoin story in layman’s language and it’s perfect for this cryptocurrencies for beginners guide:
Let’s start with the basics of Bitcoin. In October 2008, in an anonymous mailing list called the Cyberpunk Mailing List, an anonymous participant using the pseudonym Satoshi Nakamoto announced the publication of an article, adding “I think I have solved a computer problem and found a way to create a system of electronic money which is direct between people, user to user (p2p). In the sense of the concept in computer science, I wrote a white paper on the use of this system and applied what was written in the article writing computer code.”
On the same day, Satoshi Nakamoto published the White Paper. You can download it online, It is available at bitcoin.org. In nine pages, Satoshi Nakamoto describes in detail and in a sense, even predicts many of the things that will happen in the next seven years, what Bitcoin is, what it can become and how it works.
But he or she or they don’t stop there. We don’t know if Satoshi Nakamoto is a man, a woman or a group of people. The last Satoshi Nakamoto then published the software and invited people to participate in network development. This gives you a first hint on how Bitcoin works.
What exactly is Bitcoin and why is important for our Cryptocurrencies for beginners
Bitcoin is software. You run it on a computer, no matter your laptop or desktop computer. It is preferable to run it on a computer that is constantly connected to the Internet. The application currently uses a lot of RAM and disk space, but in those days it was easy to use by computers. If you run the program, it goes online and finds other people using the same program. You don’t know who these people are. Certain people Creates a random network of peers, which we call a peer-to-peer network (p2p). Each participant in the system is equal to the others. There is no special computer. All computers talk to each other. This is the equivalent of the crowd in a network sense, That is, your computer. Randomly connects to other computers, running Bitcoin software and together they create a network.
This network is used to execute and promote transactions. They are encoded in digital format. They contain information about the exchanged, value, and the given permission to exchange value. No one controls this network. And this is a very important concept. You can control one of these computers, but you do not control the network. You run one of these applications. It connects you with other people and you can manage another application. It speaks the language of Bitcoin with other computers that speak that language. But no one manages or is responsible for this network.
Similarly, when you control a computer that speaks on the Internet and talks to other computers on the internet in fact no one is in power or in control of the process if you communicate directly between these systems.
The birth of a cryptocurrency that will change the world
This network began its existence on January 3, 2009. On this day, the world changed. For the first time in the history of money, trust institutions and humanity. A system was born that is completely independent of government and institutions that builds trust through cooperation, communication and computing through cryptography. This system allows people to exchange value, to exchange money and this money is called Bitcoin. So bitcoin is an application. The software you use on your computer to communicate with other computers using the same software. And because of this event you are now reading about cryptocurrencies for beginners.
Bitcoin is the name of the network that connects all these computers. There are 6,500 such computers in the world. Wherever there is internet they demonstrate their presence. There are several thousand who do not, and there are tens of thousands who just listen to this network without actively participating in it. This whole network is used to create and transfer value in the form of transactions that are measured and expressed in a new currency Bitcoin.
Cryptocurrencies are next step in evolution of money
The Bitcoin currency is different from any other form of money we have ever seen. First, it does not exist in physical form. It is the culmination of a trajectory in human history. Over the millennia money has become an increasingly abstract form of currency. We start with very tangible forms of currency. These are the goods: goat, banana, pineapple… These are very bad forms of money because you can eat them, they spoil or die. They can also be lost. These are not good forms of money because they are the most valuable object.
From this money, we moved to gold, precious stones and coins. These are better forms of money because you can’t eat them, they don’t die and they don’t spoil. They do not represent value alone, They are not the value, And this is an interesting concept. Money is not the most valuable thing. Money is the thing you exchange for the valuable thing. Bananas are not a good form of money, because bananas are the value you are trying to get. Money is the thing you exchange for bananas and it has no value in itself. They are just a symbol and an abstraction.
Money as we know it…
Money becomes something I can carry and give to someone tomorrow, and he might give me bananas in return. This future promise of value is the essence of money. That is the essence of money. Is the ability to have an abstract object that is unchangeable, unadulterated and eternal, retains its value and represents the exchange value in the future as a promise.
Over time these things have become less physical and more abstract. Why? Because people don’t like change. And if we tell someone in the past “I’m not going to give you bananas for your work. I will give you a shiny gold coin. But don’t worry you can use this coin to get bananas”. They look and say: “I’ve always had bananas for my job. I think it’s better to have bananas than this yellow thing”. One hundred years later, they already believe that the yellow thing is valuable. Then you tell them “Now, I’m going to give you a piece of paper instead of the yellow thing, But don’t worry you can still turn these papers into bananas”. And most people said “I don’t think it’s real money! I want the yellow thing”
The world goes on and in the end, we are changing and saying, “You know what You will not receive either the paper or the coin. You will go look at some numbers on a paper page or on a website. This is your amount of money in the bank. But don’t worry you can still use it to get food products, services. This is real money, you can’t touch it, you can’t see it. It’s just a number”. Finally, we come to Bitcoin. It has no physical form, it does not exist materially, it cannot be touched. It is just a digital form of money. But this is a digital form of money, completely different from anything we’ve seen before.
What are the main characteristics of Bitcoin
The difference is that this is not a form of money recorded in the company’s database or registers. This is not a digital form of money, that is a debt owed to a central bank or government. This is not a digital form of money issued by a sovereign, a central bank, a nation, a king. This form of digital money is issued through complex and energy-intensive calculations on the internet. It is stored simultaneously on each computer that is connected to the Bitcoin network. This currency is valid independently from any computer participating in the Bitcoin network. It cannot be tampered with falsified, censored, frozen or confiscated. It can be transmitted as information anywhere in the world. It can be verified independently by anyone who receives it. And it is not controlled by anyone. Its value is not controlled.
Its issuance is not controlled. Ownership of it is not controlled. It is exchanged directly from one person to another without intermediaries. If I use my cell phone to make a payment to someone, I’m making a digital transaction recognizing the fact that through my digital signature I authorize the transfer of a certain number of bitCoin that the network knows belongs to me to another Bitcoin holder. The recipient of this Bitcoin will be able to control the received funds through his own digital signature, through a cryptographic key. You don’t need to know anything about digital signatures and cryptographic keys. When you use Bitcoin you see an application on your mobile phone or computer. The app tells you that you have three Bitcoins. It allows you to see the recipient’s address, which is a number and resembles an email address.
How does Bitcoin exactly work?
The application is user-friendly and that’s why Bitcoin is still one of the best cryptocurrencies for beginners. allows you to select the Bitcoin number you want to transfer and when you press “send”. It uses the digital signature and private key in your device to create and sign a transaction that is reported to the entire Bitcoin network. With the message “I transferred this value” Then the whole network learns that this amount already belongs to someone else. They don’t know who this other person is. No one knows. When you perform a Bitcoin transaction it is not linked or attached to an identity. There is no need to create an account, no need to register, give an ID or name location, address, age, gender, race, religion, nationality, anything… You don’t even have to be human 🙂
But it’s true Bitcoin allows for the first time In human history, non-human subjects to control and possess value. This is strange because we have never had it in any legal system in the world. We have the legal fiction of corporations. Corporations may have value, but they can exist as associations between living human beings.
With Bitcoin, a software agent that is not owned by anyone to own and trade Bitcoin internationally. This creates many interesting and very disturbing opportunities for the future. Artificial intelligence systems can own and control money without the involvement of any human being. There may be corporations without directors. They are completely controlled by software without the involvement of human beings…
Bitcoin is one of the best cryptocurrencies for beginners
But back to the people. If you are a person who has installed a Bitcoin wallet, you mustn’t go through a complex test to install this software. You must be able to download an application. That is all. If you have an iPhone you need to remember your iTunes password to install the app. So far, I’ve noticed that this is the hardest part of participating in the Bitcoin global economy. Remembering your iTunes password. But if you can do that, If you have access to the Google Play Store, If you have a basic knowledge of mobile applications, If you can download the .exe file to Windows and install it, If you can double-click, that’s it.
You don’t have to give your name or email address. You don’t register or create an account. You don’t have to prove who you are where you are or prove you deserve it. You do not need a credit history. You do not need permission (authorization). This is completely different from any piece of the system we’ve had before the internet generation.
Free as the internet which power it
The concept is very familiar. When you open a browser and start using the Internet… Do I need to register or get a license to use the internet? Do you need to create an account to visit Wikipedia? No, the only requirement is that you can install, open and use a web browser. It was a time when the idea of allowing every human being to communicate without borders and censorship on the World Wide Web was horrible for some people. For some, it is still appalling. Most of the younger generation find this idea liberating on a global scale.
Bitcoin does the same with money. What happens when every human being on the planet with a simple download and installation of the application can become a member of a global economy without borders? That allows people to send and receive money at will anywhere in the world 24 hours a day without interruption. For the last few years. And the fees do not depend on the amount of money you send but are paid simply for the capacity of the network you use.
You can make a Bitcoin transaction for about $ 1. It doesn’t matter if you transfer $ 1 or $ 100,000. You always pay $ 1. It doesn’t matter if you send the amount from one city to another in your country or send it to the opposite end of the earth. It doesn’t matter if you are an individual or a corporation or send the amount to another individual or corporation. It doesn’t matter if you send it to someone who is rich or poor. You can do it. Bitcoin completely changes the way we approach finances. But this is only the first layer of its effects because the technology that allows two people from opposite ends of the earth to exchange protected value without knowing and trusting each other discovers a wide variety of applications that we have not yet imagined.
Bitcoin is also a platform
Bitcoin is not just money for the internet. Bitcoin is a platform. The technology used by Bitcoin is a combination of
( 1 ) blockchain. The global transaction ledger that records each transaction by
( 2 ) the decentralized consent mechanism called “proof of operation”, which allows security in the Bitcoin blockchain from
( 3 ) the open access system allowing everyone to participate without borders and from
( 4 ) its boundless and neutral nature allowing participation, no matter who we are.
The only thing that matters is whether a transaction is valid not who its source or recipient or what the size of the transaction is. These building blocks allowing Bitcoin to exist and open the door to tens, hundreds and thousands of applications of trust. In essence, Bitcoin is a replacement for “trust through institutions”, with “trust through networks”. For centuries humanity has depended on the fact that, in order to coordinate activities between a large number of people, we must have something to believe. In so far the best answer to this problem has been the institutions, rule-driven associations of people, policies with built-in people-led monitoring, transparency and accountability, to build centers of trust through tradition, reputation and duration.
Institutions of trust are failing around the world, They fail when they are newspapers, they fail in political institutions. They fail in a number of ways. The reason for their failure is that they are large-scale institutions made for industrial societies And we are no longer industrial societies of nation-states. We are now information societies with global dimensions, societies that cooperate across borders on a large scale. We are not now addressing issues that affect 30 million people in one country, but 7.5 billion people on one planet. Traditional institutions do not work for problems and cooperation of this magnitude. They fail to cover the scale. They are not evil, they are not deliberately corrupt. They simply fail to solve the problems of a global society.
Is Bitcoin right cryptocurrencie for beginners?
In the period in which we see the old institutions failing, we also see the emergence of new governing institutions. New systems for global cooperation are emerging that allow us to collaborate, communicate and solve large-scale problems. The first such system was the internet. With it we saw the first system of communication that transcends nations and crosses borders. It allows anyone and everywhere to communicate.
Bitcoin represents the same change but happening with money. It is a metric, network-centered monetary system which is beyond the nation-state. It is a network-centered monetary system that can scale and allow people to collaborate globally. It allows anyone and everywhere to participate in the global economy without barriers without borders, without an ID card without recommendations, just by using the software. This will change the world, conclude Antonopoulos. And yes, this one is still one of the best cryptocurrencies for beginners if not the best one. If you ask me, is the best!
Most popular and widespread Cryptocurrencies for beginners in 2021
The number of cryptocurrencies constantly growing because of the success of Bitcoin. Other most commonly used cryptos also most suitable cryptocurrencies for beginners are:
Ethereum is one of the best choices of cryptocurrencies for beginners. It is designed to be resistant to fraud and manipulation means it offers a variety of new solutions to everyday problems that are now solved very expensively: voting machines, registration of internet domains, registration of legal documents, medical software, the transfer of goods, services and “smart assets” between individuals, contracts between individuals, reputation systems and financial derivatives. All these applications can be created on a network where users are always in control of their money and their personal data.
Litecoin is also one of the best cryptocurrencies for beginners. Litecoin is a decentralized online currency created in October 2011. Litecoin can be used to purchase services such as website development. Fortify goods like jewelry. Litecoin provides a safe and easy way for merchants to accept money, as there are no fees to receive payments and no chargebacks. All transactions are recorded on a public ledger known as the blockchain, so payments can be immediately verified.
With Litecoin you can send money anywhere in the world to anyone instantly. The transaction fees are considerably less than those charged by major credit card companies, traditional bank transfers and even other digital payment processors. For example, a business in Singapore can receive a payment from a customer in San Francisco in a matter of seconds. Additionally, both parties have clear proof that the payment was sent and received.
Litecoin works using secure software that allows you to make payments as easily as sending an email. You can send and store them securely on your computer or your local device. There will only ever be 84 million Litecoins, so you will never have to worry about inflation decreasing the value of your Litecoins. It has a stable, established marketplace consisting of many exchanges that handle tens of millions of dollars in Litecoin trades every day.
Dogecoin is a little bit like Bitcoin. Essentially what that means is that there are clients on the network that store a log of all transactions that have been made. So if you have some Dogecoin and you want to transfer those coins and then all the clients, all computers on the network with the Dogecoin client running, will confirm that transaction. So there’s no central server running control. It’s all done by an audit log thing called a blockchain.
Bitcoin Cash (BCH)
Nex in the list of cryptocurrencies for beginners is Bitcoin Cash is a chain that was created on August 1 st, 2017. That blockchain split off of Bitcoin, so it is very similar to Bitcoin
Bitcoin SV (BSV)
Bitcoin SC was created by forking the Bitcoin Cash at the end of 2018. So it’s a similar story as its older predecessors. Also one of the cryptocurrencies for beginners that I recomend.
Cryptocurrencies for beginners – trading
Now, that you know what cryptocurrencies are, let’s talk about investing in them. First of all, you have to be very careful and be careful not to be misled by FOMO fear of missing out. Like anything in life, one simply does not just invest in anything without knowing what they’re investing. So, just keep that in mind. Again, don’t be caught up in the FOMO. Most people see something on the rise and then there they think they’re gonna make it. It’s just like the stocks, right. Oh, I heard my friends investing the stock. Let’s go, buy rubbish, complete rubbish…
The first thing I tell anybody before investing in cryptocurrency is “don’t”. And I’m not saying, don’t because it’s not a good idea. I’m saying don’t because you don’t understand it. Okay, like myself, I would invest in anything unless I truly understand it.
Understend the field
So the first step is: I need to understand the field. I need to know what cryptocurrencies are? If you guys don’t know what Bitcoin is, what Ethereum is, what cryptocurrency is, what blockchain technology is… That’s the first step, understand what you’re investing in and take your time. Spend a couple of months reading about it to become an expert in the field.
Okay, then, once you have a grasp around the industry, the technology, the different cryptocurrencies that you can get started, the next step is to open up an account on any single exchange. So you can go to Exodus or Coinbase. Those are simple ones, easy to set up and deposit some money. Don’t start big! People think they will quickly become rich investing in crypto. That’s not the case. You don’t just become rich at doing anything. There’s a process, a strategy. There’s you know how risk-averse are. There exist so many different variables for this, so I always tell people to start small. Put 500 bucks in because, hey if you’ve been investing or if you’re thinking about it and if you study the space, you see this volatility. Crazy volatility all over the place.
Start small with prooven cryptocurrencies for beginners
Okay, so start small with $ 500. What you invest in? So, you connect your bank account either through Exodus or Coinbase. You have deposited money, a fiat currency. What cryptocurrencies for beginners I recommend? You just get the big two. You get Bitcoin and get Ethereum for starters. Keep it safe and simple. I think they are wey best cryptocurrencies for beginners. Even though there is a lot of volatility. It’s still roughly safer than the other cryptocurrencies… So you have $ 500 bucks. I would say 250 Bitcoin, 250 Ethereum.
If you want more you should research
Now, what you want to do is continually researching and educating yourself on the other cryptocurrencies. There are millions out there. I have mentioned just some of the most popular before. Just look them up. You can do your own research. Pick one and find out why that cryptocurrency exists in the first place, find out the team behind it, find out what problem they solve. Read their white paper and really understand it. Ask yourself, if you should even put any money into this? Because, like any different market, cryptocurrency is no different. You have speculators, you have market demand, you have supply and demand, you have different layers and different variables and different teams and different individuals and institutions manipulating their price. It is no different than anything else.
So you have to understand all the different layers. So do your research and every single coin, for example, do your research on Tether, do your research on Ripple, do your research, I don’t know, Cosmos for example. You have to research and study every single one to understand the field okay? It’s like if I want to start investing in stocks. So I’m not just gonna simply invest in them. i’m gonna research, Tesla, Amazon, Google, Shopify. I’m gonna find out who’s on a team, who’s on their board, what’s their plan, what’s their earnings from last year, etc… All these numbers and all these things I need to know before I invest. So you just get that information.
Talk to people
The next thing you need to do is talk to people from these cryptocurrencies you are interested in buying them. They have public figures, not all of them, but actually, most of them do. Talk to these people, send them an email or talk to the team and figure out what’s going on internally. Join their channels, join their Facebook groups and check that out. There’s a bunch of different resources like that, but really go into the community and see what individuals from these coins are actually doing.
Finally, once you have some information and let’s say you’ve noticed that Bitcoin has gone a little bit up and Ethereum has gone down a little bit there is time to allocate maybe like a quarter. And you buy new coins. You look at your holdings like any other investment you’re like okay, I’m gonna move a little bit to this and you move a little bit to that. So that’s it!
It’s not complicated and these are small baby steps, but these baby steps gradually increase to bigger steps, and these bigger steps graduate increases huge, enormous steps. So you might go from $ 500 investment next thing you know you’re investing thousand or twenty-five thousand next. And so you can come to big money. And that’s something not to be messed around with no matter who you are. You don’t want to be losing that out. And people have lost millions of dollars in cryptocurrency space because of greed. If you’re missing out on greed it’s a very dangerous thing.
Get free crypto currency for training
I will conclude this cryptocurrencies for beginners guide with useful advice. If you don’t have the money to invest in crypto or still don’t want to invest your fiat money in it there is another way. You can earn some free cryptocurrencies. Actually, this is a good way to learn a thing or two about the crypto world faster. You can still mine some free Bitcoins. I wrote about this method here. Or you can claim some free satoshis on crypto faucets. These are the websites that offer you free parts of cryptocurrencies. But be very careful because the vast majority of them are fraudulent and won’t pay you anything. They will just waste your time.