In this article, you will find questions I was already asked about the crypto topic and about me (of course, I would not forget myself, I am not that humble). I thought making such a section would be a good idea. Yup, it is a long read, but, after going over it, you should have a basic understanding of how all things work.
I try to explain most of the IT and technical terms as understandably as possible. Sometimes I could not avoid using additional technical terms in my explanations. I am no expert, I did my research, I did my testing, this is my own understanding.
- 1. How do I get to your Intro article? (Hehehe I made this an FAQ question)
- 2. I already know everything and I just want to skip your FAQ. Where is the link?
- 3. Why does every single post on this blog have the same background but with different colour variation?
- 4. So what is this Bitcoin, cryptocurrency and BLOCKCHAIN in general? [technical]
- 5. What is BLOCKCHAIN? (More about blockchain)
- 6. Am I anonymous when using cryptocurrencies (can someone identify me when I use them)?
- 7. What are Altcoins?
- 8. What are BTC, ETH, LTC or some other strange abreviations that the news writes about?
- 9. Why the word CRYPTO?
- 10. Do I need to know about the technology behind cryptocurrencies?
- 11. What are the qualities, pros and cons of cryptocurrency (security, fees, etc.)?
- 12. What is VOLATILITY, VOLATILITY SOFTWARE, VOLATILITY BOT or VOLATILITY ALGORITHM? (More about VOLATILITY)
- 13. Why are there so many cryptocurrencies now or what the hell is ICO?
- 14. How to get ICOs?
- 15. What is HARD FORK? [technical]
- 16. What should I invest in first?
- 17. What can you do with Bitcoin or other cryptocurrencies?
- 18. What do I need to start with cryptocurrency? [technical]
- 19. What do I need to start with cryptocurrency? [non-technical]
- 20. What is a WALLET? [partly technical but a must-read]
- 21. What is a SATOSHI?
- 22. What is a “Pump and Dump” (P&D)?
- 23. What does it mean to “withdraw” and “deposit” (“send” and “receive”)?
- 24. Can I send someone any of my wallet’s public addresses?
- 25. Can I send or show someone any of my wallet’s private keys?
- 26. Are the private keys the only thing I have to protect?
- 27. Is Bitcoin a “bubble”?
- 28. Is it a good idea to “just” buy Bitcoin and hold it? Why would I bother with other crypto?
- 29. What should be my primary source of information about crypto?
- 30. How am I supposed to read this blog?
- 31. What do you do with cryptocurrencies, Kyril?
- 32. How do you know all these things, Kyril? Are you so clever?
- 33. I love this guide, Kyril, I want to help. Can I make a donation?
- 34. How do I finally leave this FAQ and continue to the next article?
1. How do I get to your Intro article? (Hehehe I made this an FAQ question)
If you have not read my introduction story blah, blah, blah, you can get to it using the following link.
If you are new to crypto, I strongly advise you to stay and go over this information. But I am sure you have your reasons and I do not judge. So, to continue, follow the link.
3. Why does every single post on this blog have the same background but with different colour variation?
You noticed? Well, as the world of crypto is kind of risky at the moment, with some areas riskier than other, I thought it would be wise to classify the topics into groups – each group having a different LEVEL OF RISK and a different main colour. I classified the risks into 4 colour groups:
- Blue – Neutral. Posts with blue background just talk about something (general topic), describe an activity that does not involve any risk at all or describe something that does involve risk but there are no other options to do it. I put buying BTC (or ETH or other strong crypto) for fiat (real physical) currency into blue group because there is not really any other way to start with crypto, this step you must do.
- Green – Zero or low risk. Low risk is usually only connected to you not disclosing your passwords or just a need to protect your ID data.
- Yellow – Medium risk. Risky but manageable. Using crypto exchanges, buying some researched ICOs (what these are you will find later or HERE) can be found here.
- Red – High risk. Risky investments or lending. You should always carefully choose what you want to invest in. If you do it wisely, however, you can avoid high risk. As it usually goes, high risk may bring the biggest profits.
You can distinguish how risky a thing (described in an article) may be just by looking at its thumbnail. Genius, right? I know.
On rare occassions, once in two lifetimes, five blue moons, etc., there may be a post with a background of a different colour than the ones described, like purple. Such a post is rare, unique and important and you should pay attention to it. Something like this.
4. So what is this Bitcoin, cryptocurrency and BLOCKCHAIN in general? [technical]
Bitcoin is a CRYPTOCURRENCY, a term that is quite popular these days. Bitcoin, as the pioneer of so called BLOCKCHAIN technology, is now a thing referred to as DIGITAL GOLD.
As any digital cryptocurrency, it does not exist in any physical form – you cannot touch it nor smell it. It exists solely in the digital space. To be communicated around the world it requires an all-accessible network to use – the biggest and most used network being the Internet. Or does it?
Not absolutely. The greatest feat of this technology is its decentralized peer-to-peer network usage. A PEER is your device, wallet or miner, etc. Network communication is synchronized and shared among all devices within the network without any arbiter – therefore there is no single server, all clients are servers, each client can communicate with other client directly, these server-clients are called PEERs.
Cryptocurrencies are built on top of blockchain technology, a sophisticated and secure transaction and verification system. Blockchain can be viewed as a public and shared long list of all transactions that exist or existed, a public ledger. Each transaction can be viewed as a bank check with 3 (or more but these 3 are essential) pieces of information: payment sender’s encrypted ID, payment recipient’s encrypted ID and the amount paid. This entire history of all transactions is stored in every single peer (your device, wallet or miner). Peers in the network are called nodes.
What this basically means is that it is extremely difficult, almost impossible, for a participant (node/peer) in the network to change something, as “his” modified information would conflict with all the others and would be proclaimed as fraud. Such fraud does not exist in the blockchain (at least while no one single entity owns at least half of all nodes in the blockchain).
Lastly, once more to the requirement of the Internet. As already mentioned, devices (peers) of the blockchain need to synchronize the information about transactions among themselves as there is no all-knowing server. This means, Internet really is not a requirement, it is completely sufficient to connect two devices together (or use a small local network) without Internet connection and send transactions from one to another (which gives the technology so much more freedom). This way they could register the transactions between each other. However, the problem is the need to confirm those transactions as this usually requires other peers that can guarantee the transactions were correctly registered (confirmed) in the blockchain. So, although the Internet is not needed to send and receive transactions, it is necessary to get transaction confirmations from as many outside peers as possible and maintain a trusted and secure system. The more devices form the blockchain, the more trusted and secure it can be.
5. What is BLOCKCHAIN? (More about blockchain)
I would still want to describe BLOCKCHAIN a bit more. I already talked about it in the previous question HERE.
In that previous question, I wrote that blockchain is a “ledger”. I, as a non-native English speaker with zero knowledge about trading and economics, did not understand the word “ledger” in the beginning. So think of the ledger as a book of financial records – accounting book if you will. Whenever you buy or sell something (you can buy and sell your work or services too!), you find the first empty line in the book’s page and write a record about this deal there. The next time you want to write a new record into the book, you write it in the next line, etc. This way you keep a history of your deals.
Why would someone call a public ledger – a giant list of financial records – “blockchain”? You guessed it, blockchain can be viewed as a CHAIN of BLOCKS.
New transactions are made every day – the history of transactions gets larger and larger because new records are continually added. Blockchain is a giant ever-growing storage of records (transactions) but it would be quite cumbersome to add all records into one single place (using one long page for the entire ledger, one file). This kind of use is never a good idea because of difficult scalability, parallelization, filtration, etc. So the blockchain (the ledger) is formed by BLOCKs. One BLOCK of BLOCKCHAIN represents one page of the ledger (a page with certain number of transaction records). When new transactions are made and the blockchain runs out of place on its pages (all free rows on a page/block are filled), new block must be added. This is how the blockchain grows – how the CHAIN is formed.
I said new transactions are “added” to the blockchain. The word “add” is not really fitting in this case, the transaction records are not just “added”, they have to be “confirmed”. If records were just added, the system would not be very secure. On the other hand, confirmations require proper digital signatures that are formed using cryptographic methods – these make the system very secure. Confirmations are done by MINERS, special nodes in the blockchain network. Some blockchains allow normal (no special equipment required) nodes to be MINERS too – here the transactions are confirmed by the signatures generated from the previous transactions in a process called “staking” (I talk about this later when I describe crypto lending).
If you would like a more thorough and logical description of blockchain, I really like this article HERE. Respect to the author.
6. Am I anonymous when using cryptocurrencies (can someone identify me when I use them)?
The way cryptocurrencies (most of them) work makes their users pretty much anonymous. So, yes!
The system itself is not anonymous as the history of transactions – the whole blockchain – is shared among everyone, so it is public. Everyone can view this history. However, the information written there will probably not be much use to anyone as every piece of identification information is just a random mash of letters and numbers.
What this means is, when someone knows your public address on the blockchain, he could see the balance of your funds (connected to the public address) and, theoretically, take a look at the list of transactions connected to your public address. Why theoretically? There may be such an extreme amount of records (of transactions) in the blockchain, that finding all yours (with your address in them), may take a lot of time. There are existing “block explorer” services which allow you to search for transactions in individual blocks of a blockchain.
Also, remember, you can change your address anytime (have a new address generated) or transfer your private keys to a different location/wallet (I will talk about this in the following questions). The way it works, you do not really need to generate a completely new address, you just take your existing private key and use it to generate a new address from it (nothing else changes, only your address will be diferent). I should also note that creating a new address will not disable the old one, you can actually have millions of addresses generated from one private key (it does not matter which address is used, you will get the funds the same way). You can also – and, if you decide to trade, you WILL – “bounce” your funds – send them to your other wallet, to an exchange, etc., so they are not connected to JUST ONE address. All of this makes finding YOUR transaction history in the blockchain very difficult, so you do not need to worry about that so much (just be sure to change your address once in a while – crypto wallets usually allow doing this).
Nevertheless, you should understand, there can always be problems and there is always a way. I am sure, if someone were really determined to find who you are, he/she would eventually find a way. Protect yourself as much as you can!
You will find more information about security in the following questions of this FAQ.
7. What are Altcoins?
Every cryptocurrency that came after Bitcoin is now referred to as ALTCOIN or alternative currency. Guess who the king is!
8. What are BTC, ETH, LTC or some other strange abreviations that the news writes about?
Historically, quite some time back, stock market used telegraph to relay information from one place to another. Diamond prices went up, so they wanted to send this information. An incredible invention for telegraph and machines was TICKER TAPE. This was a tape with holes it it (certain pattern of holes represented certain letter of the alphabet, a symbol, a number, etc.) and served as an input of the machine. This tape, when inserted into telegraph, was automatically read symbol after symbol and this information was sent over the telegraph cables.
As sending “Diamonds” every single time (when people wanted to talk about diamonds) was redundant (and took up a lot of symbols on the tape), some unique identifiers had to be invented to shorten the communication. We call these abreviations symbols or ticker symbols. Every traded stock, asset or cryptocurrency has one (historically, maybe even more than one, as there were multiple exchanges and each exchange could have their own symbol).
So BTC is a short form symbol of Bitcoin cryptocurrency. ETH is a symbol for Ethereum cryptocurrency, LTC is Litecoin and so on. When you start trading on exchanges, you will have to move around using these symbols because many exchanges do not allow to search for a currency by its complete name. Coinmarketcap.com is a great website to find associated symbols (and much more information) of currency by its name. Just search for a currency or open its page – there you can find its symbol in parentheses next to its name.
9. Why the word CRYPTO?
Cryptocurrencies and currencies in general represent certain amount of resources which can be moved around in transactions. In simple terms, transactions are actions to move certain amount of currency from one place to another. Transactions are identified by the amount sent, sender and by the receiver of this currency.
When using a bank transfer, your transaction is formed by the information you write down – you are the sender and the receiver may be your friend, colleague or whoever. After you send a request for the transfer to your bank, the bank issues a transaction. The bank – (the “trusted middleman” as they say and) the performer of transaction – has to guarantee that the information does not change on the way. If it does change, they are to blame (if they confess to it, of course).
As cryptocurrency uses no central hub, no server, no bank, the perfomer of the transaction is the blockchain itself (and every node – e.g. your device – in it) as the message about a transaction is sent to every device on the blockchain. The base princliple of transaction system and verification of transactions is a matter of CRYPTOGRAPHY (encryption and decryption of data to secure it), as each transaction has to be secured, so that no one is allowed to change or modify the transaction information on the way. Therefore, the word CRYPTOcurrency.
10. Do I need to know about the technology behind cryptocurrencies?
More NO than yes. If you are here to become a trader, holder or lender of cryptocurrency, you do not need to know anything more than what I describe (perhaps even less because I tend to go into unnecessary details).
However, keep in mind these question only answer the basics. Technology will always advance, yet the fundamentals should stay the same. Learning these basics and getting to know a bit of cryptocurrency background should be your first step into crypto.
11. What are the qualities, pros and cons of cryptocurrency (security, fees, etc.)?
Now there are many points I could talk about, I will just mention a few I believe are the leading ones. Please note, these are general qualities of a cryptocurrency, not qualities of a specific one.
- A user’s anonymity (full or partial) also serves as a measure of his security. The only identification you use in the blockchain is your digital address (a set of symbols, letters and numbers).
- No one has access to your funds, only you. No one sees your balance (although balance tied to a known address CAN be read), only you – if you protect your private keys that is!
- Bank transfer fees? No more banks asking for exorbitant fees whenever you decide you want to use your own money and pay something!
- Cryptocurrencies are decentralized – so the actual assets are not stored in one money hub like the country’s national bank. Instead, the information of all transactions is stored within all clients. We are all banks now (although we cannot identify ourselves using names) and we all know what trades happen among all other banks! Sending crypto money to your neighbour is just the same process as sending it to your friend 2000 km away.
- (EDIT) There are certain fees when sending crypto from a private wallet to another address but these are uncomparable to those issued by banks and, usually, can be omitted. The SENDER always pays the fee, the recipient gets the funds for free. Withdrawing (sending) funds from your private wallet will always cost you something – your wallet should inform you about the fee. EXCHANGES usually DO NOT APPLY fees for sending cryptocurrencies from their wallet to a different address (e.g. your private wallet or address on a different exchange) as they have their own fee system applied (you usually pay fees from trading, not sending funds from wallet). Use this to your advantage!
ExplanationThese fees are there for a reason. If there was no fee, a single user could flood the blockchain with many junk transactions which would result in slower transaction verification and long waiting times because the correct transactions would have to wait for their turn. In other words, the fees are there because you have to pay someone/something – called “miner” – to confirm your transactions. Yes, you guessed it right, if you ever heard of mining, this is it.
- As of now, BTC transaction fees are larger than ETH or LTC transaction fees because of how fees are calculated. BTC fees can get quite high when sending from your private wallet and they may get even higher in the future. There is one rule that applies (for every cryptocurrency) – if you send many small transactions, it will cost more than one big transaction because the number of necessary confirmations will be higher. I will talk more about the form of fees in some of my articles.
- Government regulation? NO! (At least, up until now there is none, perhaps sometime in the future there will be – like Russia announcing its CryptoRubble, its taxed cryptocurrency)
There are ,however, cons to using cryptocurrencies too:
- Volatility! (someone may consider this a good thing)
- Volatility refers to the currency’s value fluctuation over time, if the price goes up and down without any apparent reason, that is a volatile asset right there; volatility defines cryptocurrencies and is always present.
- Too much security!
- Yes, security is an advantage just as it a disadvantage. The fact that your identity is almost impossible to track, when you send a payment, means it is also impossible to track the identity of the one who receives it – if someone sends Bitcoin from your wallet to his, the chance of finding who received it are extremely slim.
- The intention of your payment (what the money was used for) also cannot be tracked. Was it used to buy puppies? Was it used to buy drugs? The transaction system does not distinguish between the two.
- If you lose your private key or someone will find it or steal it, you are done for – be careful!
Take these pros and cons as the most general ones. Of course, in time cryptocurrencies will bring new qualities, some may be upgrades, others limitations. For example, there are already a few coins that take away all of the anonymity of its users which allows the sender and the receiver of each transaction to be easily identified and tracked. I am sure, many other coins will follow. The technology (blockchain included) will always adapt to its use case.
12. What is VOLATILITY, VOLATILITY SOFTWARE, VOLATILITY BOT or VOLATILITY ALGORITHM? (More about VOLATILITY)
Perhaps you already heard these terms mentioned somewhere. Most services, which allow you to lend your crypto funds and gain interest over time, use these terms in their advertisements. I mentioned volatility as a disadvantage of cryptocurrencies HERE already.
Many real physical goods traded on the market have low volatility because their price is influenced by the real world’s events that occur once in a while – disasters influence the market for grain, giant corporations taking over certain sector of goods gives a boost to its prices. However, when analyzing the volatility of cryptocurrencies, there are are many more occassions that influence price spikes and even completely bizzare behaviour. And why does this happen? That is a good question. Every day new coins are introduced (as ICOs or on exchanges) or news is spread about a new project involving certain cryptocurrency, people believe they can get nice profits from this, so they buy. For a short time, people start looking at this coin instead of OTHERs, so the OTHER coin’s price falls. Once the hype and the first impressions fall and people realize this may not be a good idea, they sell and again may invest in the OTHER coin (meaning its price rises again to its previous value or even higher). Another example, someone hears about a company ready to invest in certain cryptocurrency, this someone writes this news into a forum, people believe that and start buying (they believe the price will go higher), other people see a difference in the chart and… guess what happens!
The crypto community is crazy, insane and very UNPREDICTABLE! Thanks to this, volatility defines the lives of cryptocurrencies. The thing is, thanks to this violent behaviour, people can use the opportunities and buy/sell (trade) to get profits in a relatively short amount of time.
Volatility software, bot or algorithm is a piece of software, a program, that mostly works autonomously and analyzes the market. It looks for patterns in the chart and evaluates when to buy and when to sell. This way it can generate profits over time. A clever trader robot that does not need to sleep (probably).
13. Why are there so many cryptocurrencies now or what the hell is ICO?
At the beginning there was Bitcoin as the one and only cryptocurrency ever running on top of the revolutionary blockchain technology. As for the notion of Bitcoin as cryptocurrency, some people liked it, some did not and said (and still say) it is doomed to go down. Back then Bitcoin’s price was also very low, maybe fraction of a dollar low.
But blockchain technology was always well received, I do not remember anyone who said something bad about it. So, back then, it really was about the technology. As Bitcoin’s price gained momentum, people started to see a different potential, a potential to gain money. It was no longer about the technology or what it can do to our lives.
So nowdays, whenever a new company wants to make something new, they try to utilize the blockchain technology and build their solution on top of it (meaning they are also building a new currency). When they do, they release ICOs (Initial Coin Offerings, ICOs in short) – meaning introductory sale of crypto tokens for company funding – which people buy with certain discount so that later on, when the coin hits exchanges or starts being used, they can sell it for a higher price. Unfortunately, many times, the coin’s price ends up very low and is not worth much.
Some of these companies release these coins even before they have anything tangible in their hands, so even before actually developing anything. They use the funds gained from ICO sale to create whatever it is they want to create. This kind of funding is also quite profitable because non-regulated cryptocurrency is still new around the world and many countries do not require you to state your income when it comes from crypto. So, free money?
I know that some companies use ICOs even without having any technology to back it up – so they just either make a hype about things they intend to do, but do not do in the end (once people already invested), or just make a new currency. Of course, many actually build giant projects that may change the world, respect to those.
I am not going to lie, cryptocurrencies are no longer about the technology they are backed with. Instead, they became a commodity. Trading with cryptocurrencies is the same as trading with oil, diamonds or fiat currencies. The technology is just a side product. Is this good? For creators and developers of these coins – probably yes, as people jump like flies to every single new coin that is getting released thinking “this is it, now I am going to get my Lambo!” Is this good for technology? I believe, sadly, no.
Every single day new cryptocurrencies are being developed and used, as this has become the new trend from companies to get their initial capital built up.
14. How to get ICOs?
Many starting companies release their ICOs and put them on sale on their websites before they even start making their product. You will not find these coins on exchanges either. Only after the sale ended on the author’s website, the coins may be put to certain exchanges (if they make it that far).
Be on a lookout for these ICO websites, read about them, analyze the contents. Usually a document, called WHITEPAPER, is released and is accessible on the website. Check out the whitepaper to understand what the goal of the company is. Search the Internet to find more information about what they want to make.
ICOs are usually paid in cryptocurrency ONLY, so no fiat currency is taken into account – you must own Bitcoin or similar to buy them.
15. What is HARD FORK? [technical]
Blockchain technology has certain bounds and limitations. It is a piece of software so, sometimes, changes have to be made, source code has to be refactored, security holes have to be patched, etc. Lower transaction fees could also be a goal of an update! But how can changes be made when so many people use the technology every day?
In order for the changes to take place over the whole blockchain, every node (device) in the system has to be upgraded to the new version. This complete blockchain upgrade does not result in fork. If every node in the network upgrades, then the whole blockchain will be updated.
However, some user/developer communities may consider this update not to be a good idea – these people would argue that this update could introduce new errors into the blockchain, new security holes, unstabilities. But, if many people are still positive about the new changes, instead of updating the existing blockchain with the new code, it is decided that a copy of this blockchain (a fork) will be created with the new code.
A specific date and time is agreed upon. On this date, the blockchain is split (forked) into two versions, a new one that contains all the updates and the old one. Basically, the old version remains with the old code and a new one with updates is created. The new version is self-sustainable and does not require the old version to work. Therefore, hard forks create new currencies from old ones.
The fork usually involves making a “hard” copy of all active and relevant nodes of the old blockchain. This means, if you had an account on the old blockchain before the fork happened, then you are going to have an account on the new blockchain with the same address and acquire the same amount of funds (that your account had on the old blockchain before the fork) in the newly created blockchain. If there was a fork of BTC coming – let’s call the new blockchain fork “BTC2” – and you had 1 BTC in your BTC wallet before the fork was made, you are going to have 1 BTC in your BTC wallet and 1 BTC2 in your BTC2 wallet after it is made.
Be careful about exchanges though. When you have your crypto funds in your exchange’s wallet, these funds are not yours (the blockchain account is not yours, it belongs to the exchange). It is therefore entirely on the exchange to give you or take away the duplicated forked currency after the fork.
You should understand that forks might not bring anything revolutionary or even usable. If people do not like it or most of the large communities reject its changes (updates), the fork may be doomed and the new currency may end up worthless. Some forks will not survive!
Also remember, hard fork of an existing currency can open a few doors to vulnerabilities on both blockchains. Before the first new block in the NEW blockchain is started, the blockchains share the same transaction history (hard fork’s hard copy is the reason for this) – after starting a new block, the transactions are going to differ (the digital signatures will differ). If the OLD blockchain and the NEW blockchain share the same structure of transactions (there is no REPLAY PROTECTION) and transaction history, and you send funds (make a transaction) on one blockchain, the transaction information will have the same content and structure as if you made it on the other blockchain. Someone may copy the information of your transaction (as the transaction is public, everyone can see it) and repeat it on the other blockchain. In order to be valid, this repeated transaction must have the same receiver and the amount sent as your transaction! This may not really seem very dangerous, but it can be abused! Example below.
More about the way this attack works can be found in this nice article HERE (describing it on one failed fork called “Segwit2x”).
Also this! Always make your own research before any fork happens so that you know what exactly is going to happen to your funds and if there is REPLAY PROTECTION!
16. What should I invest in first?
Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) are the oldest, the most traded (they always have the highest 24-hour traded volume) and the most dynamic assets with most funds in development currently going on. They are also the most used value holders on the crypto market. Take your pick. This is my outlook for what to start with as of today, 5th November 2017.
BTC is said to be worth millions in a not so distant future and it seems like it is going that way. Whenever people get good news about Bitcoin, like a big company wanting to invest in it, it goes up. Whenever there is bad news or someone wants to slow the progress or when the market gets tired of its quick growth, the prices go down (but always get back up in a matter of hours or days). That means Bitcoin’s value can move up and down very rapidly, so be prepared for that. It is the most valuable cryptocurrency, so bear that in mind as well. However, it is also a cryptocurrency with higher transaction fees and slower transfer times than other cryptocurrencies of this list.
ETH is said to be of stable value, although there were a few extreme downs on its value chart. However, from my experience, I can say it is a solidly stable investment as its price does not change as much. It progressively rises over long term. I have read many users saying ETH (its blockchain) has security issues, nevertheless, it is still one of the most traded assests – which is kind of a paradox.
LTC is a very interesting cryptocurrency. I never considered it to be revolutionary or to get much audience as it began very slowly but progressively went up. Well, looks like I missed this one. It may not seem so but Litecoin is a bigger winner of 2017 than Bitcoin. While Bitcoin gained about 2000% over this year (as of 13th December 2017), Litecoin gained about 7000% to its base price. Interesting, very interesting.
Definitely, if there is some guarantee in the crypto world, it comes from Bitcoin itself. It is the first and most important investment you should make.
Whatever you want to pick, BTC, ETH and LTC are probably the wisest options as most of the exchanges take them (sometimes only BTC) as a trading pair for every new currency. You want to buy a new coin? When it comes to the exchange, it is probably only available to be bought for BTC, ETH or LTC which also set its starting price. So always have BTC, ETH or LTC available somewhere.
17. What can you do with Bitcoin or other cryptocurrencies?
I am sure there are many different uses, but in my perspective, it all comes down to these four.
- Mine it!
- Mining is the non-risk way to acquire cryptocurrency. Simply put, you run a program (called a Miner) on your computer or other device. This program solves tasks and requires large amounts of processing power. A device (a computer for instance) used for mining is called a “rig”. The better the hardware, the better this rig performs and the faster it mines.
- As cryptocurrencies work on top of blockchain technology, the miner program solves tasks bound to certain block of the blockchain. Blocks serve as a storage of records because they contain a set of most recent transactions on the blockchain. These transactions have to be confirmed but not just anyhow, such a confirmation requires valid cryptographic signatures – and calculating these is difficult as they have to follow many requirements. This is a miner’s job and it is quite hardware and processing-intensive task to do. Basically, the purpose of a miner is discovering (completing, generating) new blocks (by confirming transactions that form these blocks) in the blockchain. Blocks can be divided into multiple parts so multiple miners can work on one block at the same time. Once a block is finished/mined, you – the miner’s owner – get a certain amount of cryptocurrency (you can also get certain amount for every part of the block that is finished). Miners can start working on the next block.
- Some coins are not meant to be mined and only hit the exchanges – this is true for many ICO coins that come out.
- Trade it!
- Low risk, medium risk or even high risk based on how much you trade with and what you trade with.
- You can trade by entering an exchange. There are currently two types of exchanges:
- Crypto-currency-only exchange. This is an exchange that only allows you to trade a cryptocurrency for another cryptocurrency, for instance Bitcoin for Ethereum or vice versa but NOT for fiat money (like Euro). Exchanges such as Bittrex or Bitthumb belong here. These exchanges usually allow you to trade without specifying personal information, but when you try to withdraw, some verification may be required.
- Crypto-fiat exchange. Exchange where you can trade cryptocurrency for real money like US Dollar or Euro. Exchanges such as Coinbase belong here. Thorough personal verification (ID scan or similar) is required if you want to use them.
- You can trade daily, weekly, monthly, whatever suits your style and schedule. But you always want to buy when the price is low and sell when the price is high, that is about it.
- Lend it!
- Medium risk or high risk but higher risk most of the time – depends based on how much you lend.
- When it comes to lending, I mostly mean HYIP (or “High-Yield Investment Program”) services, there are a few other means of “lending” and I will talk about them in the article about lending crypto HERE.
- This is probably the highest-risk way to acquire coins (money), but it may also be the most profitable. “Most profitable” is kind of a relative term here. Many people cannot trade or hold crypto because they buy/sell at the worst of times (I was quite like this when I started). If you put your money into the hands of someone else who claims he knows how to do this, it is a lazy decision but may end up quite well for you. So, indeed, lending is profitable if you are lazy and comfortable with high risks. Once you learn more (and earn more), you should only consider lending as the last resort or auxiliary income.
- Lending allows you to send a certain amount of cryptocurrency to a website, exchange it for money and allow them to use your money for which you are given a daily/weekly/monthly interest. You must allow them to work with your money for some time, so you are not able to withdraw it for a certain period of time, for example 100 days.
- Most of the lending websites mention they get their funding to pay off the lender – website user – by using a trading (volatility) bot. This bot buys and sells currency in its peaks and earns profit every single day. Therefore, they are capable of giving quite unbelievably high profits.
- I am not that naive and you should not be too. Most of the lending websites are, what people call, Ponzi Schemes (more about those HERE). As cryptos are not regulated, this is a more or less risk-free way to scam some people. Nevertheless, if a company makes a reputation for paying its customers, perhaps it would not be a bad idea to squeeze it a bit. But, as I said, high risk – remember that!
- Lending websites can eventually turn their back on you! It does not matter how revered a lending company is. It may, eventually, scam its lenders. As cryptocurrencies are not regulated, no law guards your funds and no one will prosecute the scammers if the run! Never lend too much and always be prepared for the worst!
- Hold it or “HODL” (“Hold On for Dear Life”, source of this funny nonsense HERE) it!
- Low risk, medium risk or even high risk based on the amount of research you make before buying. The more research, the lower the risk! (this applies to everything around crypto)
- Holding the coin requires you to buy it first and trade it after, so we could say holding and trading have the same purpose. Still, I think it makes more sense to separate them.
- You buy a certain amount of cryptocurrency and pray for the love of crypto god that the price is going to multiply in the future.
- Bitcoin as the god-sent first child will go higher, I believe, so holding it is always a good idea. Also, every new cryptocurrency can usually be exchanged for Bitcoin so the prices are stated based on it.
- When I am talking about holding, I also mean finding a different coin out there that may find its audience and gradually gain price. To find such a coin you have to Google a bit and find some information about it – how it is going to be used, what companies partenered with the authors and such.
- You can watch my predictions in my HUB HERE to see what I believe is currently good for investment. I update every time I find new information or whenever I see some future in a coin. These predictions are MINE (made by a mildly experienced non-professinal – I should have this written in my CV, hahaha) and NOT GUARANTEED. When I say “predictions”, I truly mean “investments” – these are not just words, I really invested (sometimes a lot, sometimes a lower sum) and now I wait for the moment to sell high. When I find information about my prediction which makes it a bad investment, then I have to change my predictions (sell most of this investment), perhaps completely remove the coin from my prayers (no more fun, sell all of it!). Follow at your own risk!
18. What do I need to start with cryptocurrency? [technical]
You need one thing only, a unique address for every cryptocurrency blockchain that you want to use. Meaning, you need an address for BTC, address for ETH, address for LTC, etc. Yup, that rhymes. What is this address? It is the ID of your blockchain account.
To clarify, you are just a participant in a system that is shared by everyone. You do not own your BTC funds, you only own their digital signatures in the blockchain. Technically, you do not even own the digital signatures, you own a private key to access those digital signatures. This private key unlocks access to the digital signatures.
Even though I said you only need a unique address, an address is a public identification (if someone wants to send you funds, he needs your public address) of your blockchain account. To access the digital signatures (associated with your account), you need a password which is the private key I talked about.
Oh yeah, even though I said you only need a unique address and a private key for access, you also need a public key – a key that you do not really ever use but it is important as your public address is created from your public key (once you have a public key, you can calculate the public address). Or… you do not need it. The way it works, you only need the PRIVATE KEY as both the public key and public address can be derived from it. I used the word “derive”. Basically, this means “generated from”. The keys have certain mathematical and logical relationship so you can take your private key and generate your public key from it using this relation. This link is just one-way so you cannot generate your private key from your public key. A public key can be derived from your private key and a public address can be derived from you public key, so: ‘PRIVATE KEY’->’PUBLIC KEY’->’PUBLIC ADDRESS’. Nevertheless, all these 3 pieces of information have a role to maintain security in the system, so they are used .
As this may be quite complicated for you to remember and use, that is why we use WALLETs. A wallet stores this information and solves all of the problems of communication within the blockchain for you. When using a wallet, you really only need to know your public address on a blockchain.
19. What do I need to start with cryptocurrency? [non-technical]
20. What is a WALLET? [partly technical but a must-read]
A wallet is a node in the blockchain network, a hardware device, a program or application that has a unique address assigned to it. As there are more blockchains – different currencies run on different blockchains (some currencies even share blockchains with other currencies) – you need an address for every blockchain you are involved in. This address represents a public ID of your account in the blockchain.
There are wallets for only one cryptocurrency (every new currency probably has a website where you can find their official wallet, a downloadable program maybe) and there are multi-purpose wallets for many different currencies. The multi-currency wallet can be considered a wallet of many smaller wallets, each having access information for their corresponding blockchain.
Cryptocurrency is not stored in a wallet. Instead, a private key (secure digital code known only to you and your wallet) is stored there. This private key has ownership of (can be used to derive) your public key, which in turn can be used to derive your public address (a public digital code connected to a certain amount of currency). Private key is required to access the funds connected to the public address. Your wallet stores your private and public keys, allows you to send and receive coins and also acts as a personal ledger of all your transactions (you can see the history of what funds you received and what funds you sent).
So what is a wallet? A wallet is a keyring.
- Email works pretty darn similar. Email is a digital storage for messages. Your email address represents a public address that anyone can send a message to. It is public, so it is supposed to be shared with the public. When you want to send an email to your friend, you send it to his public email address “friend@some_domain.com” that your friend gave you . Email address is an analogy to a PUBLIC ADDRESS in the blockchain.
- People can send whatever email they want to your email address (when they know your email address) but they should not be able to read your emails. So, what if you want to write an email or read your emails? Well, your email address is not enough for that, you probably also have a password to your mailbox so that no one can access your emails but you. With this password you can open your email mailbox. The password to your mailbox is an analogy to a PRIVATE KEY to your public address in the blockchain.
- A multi-currency wallet works like an email client – so it is a set of email addresses and their corresponding passwords. If you ever used Mozilla Thunderbird or similar, you probably know what I am talking about.
There are 4 types of wallets (there might be more perhaps):
- Online wallet
- For me the worst choice because the funds in this wallet do not belong to you!
- A wallet on an exchange, a cloud service wallet.
- Offline sofware wallet (like an application) on your computer or your smartphone
- The quickest and most versatile option, I recommend!
- The wallet is called OFFLINE because it stands on its own as a standalone application that you can run without network access. However, you will still need to be online to send funds or receive confirmations of your transactions.
- Hardware wallet
- A specific piece of hardware to store you cryptocurrency keys, a USB or similar.
- This is the safest you can probably get nowdays.
- Paper wallet
- You write down your public and private key on a piece of paper and enter them every time you need to make a transaction. You still need a computer or smartphone application where you enter your details – so not really much of a win.
- OR you print out your public and private key QR codes on a piece of paper and, everytime you need to use them, you can scan them with your smartphone.
When you start a software wallet for the first time, the first thing the wallet does is that it makes a new account on BTC (or ETH or other usable currency’s) blockchain – it asks the blockchain to generate a NEW PRIVATE KEY for you and, based on your private key, it is given a new address on this blockchain. Your wallet will now operate on BTC (or ETH or other usable currency’s) blockchain under this address. This is done for every currency that you deposit into your wallet.
After you get a basic understanding of crypto wallets and make a purchase on your first exchange, you find – you do not need your own private wallet. As blockchain is a network of nodes, every connected node that sends/receives funds on blockchain has an account there – and so does every exchange. Therefore, every exchange that you register in, must give you access to a wallet/wallets that you use on that exchange.
Be careful however! As exchanges have their own wallets, they also own the private keys to these wallets. These private keys do not belong to you. If you just want to keep your funds on the exchange, there is no real need to make yourself a private wallet. That is, if you believe that the wallet in that exchange is safe and secure. Many exchanges were robbed already. They do get more secure after every attack, of course. But who knows when someone invents a new way to break the security of the exchange? That is a good question. So, be careful!
My advice is, do not leave too many funds in the wallets of exchanges, only small portions that you want to trade with. Send everything else to a private software or hardware wallet.
Oh, and one last thing, if you own multiple private wallets, do not send funds between them using the standard WITHDRAW function, at least not when using BTC (fees may be high). Most of these software wallets allow you to display the private keys that you own (these private keys are the ones your wallet is given the first time you use it, one private key for one blockchain), export them or import new private keys manually. Remember, the wallet only knows the private keys, if you export the private keys and import them to a different wallet, you basically move the ownership of the funds (funds connected to the private keys). If you really have to move funds between your own wallets, export the private keys from one wallet and then enter those private keys into your another wallet. Not every wallet allows this but many do! There is NO SENDER FEE if you do it this way!
21. What is a SATOSHI?
A SATOSHI is the smallest unit of Bitcoin on the blockchain worth 0.00000001 BTC. As BTC’s price is quite high, not many people buy 1 BTC now. Saying “I will buy 0.001 BTC” sounds a lot worse than saying “I will buy 100,000 Satoshi”, doesn’t it?
As for a ticker symbol, the only one I ever heard was “SAT”. But, as SATOSHI does not refer to a new currency and is used only to specify fractions of BTC, there will never be a ticker symbol. SAT ticker symbol may be, in the near future, used for a completely unrelated new currency.
Satoshi was named “satoshi” after the original creator of Bitcoin, Satoshi Nakamoto. This very unique name is not real, it is supposed to be an alias for the person/group that came up with this incredible invention – yeah, even the author wants to stay anonymous.
More can be found HERE.
22. What is a “Pump and Dump” (P&D)?
Now this is something to look into! “Pump and Dump” is a scheme when some people spread false or misleading information about an asset. The goal is to falsely persuade investors to invest into something, although there is no real reason for them to invest in it. The only goal is a “hype”. The “Pump and dump” group members invest into an asset (buy a lot when the price is low) and continually do so (but in much smaller amounts as the price gets higher) over a shorter period of time (up to a few days). When some people see a movement in the chart, they start investing too. As the price gets higher and higher, more and more investors jump on the “hype train” because they believe in giant profits. When the price reaches high enough, the members of the group start selling (sell when the price is high). As soon as they sell, the value falls and many investors (out of fear) start selling too. However, the price may fall so fast (matter of tens of seconds) that some investors, who invested too late, fall short and lose a lot of money. On the other hand, the group gains a lot.
“Pump and dump” groups may use this strategy on the most unknown or useless coins (as these do not have much value in the beginning) and many people cannot find a lot of information about them. But do not be fooled, there were already large pumps on many well-known cryptocurrencies.
In the previous questions (HERE and HERE) I talked about volatility, a quality that belongs to crypto. Well, because of cryptocurrencies’ volatility, it may be sometimes quite difficult to distinguish between a pump and a normal movement of crazy crypto-investors.
I fell for so many pumps… Man, I am ashamed to even say the number (no, no, no I am not counting *sob*)!
Whenever you see that a coin is reaching new highs (big highs), you should look around, search Google, go to the coin’s homepage and read if there are any news that justify the sudden growth. You may find a few people talking about good prospects on social media or forums but that is not a legitimate source of information and can be a part of the scam – do not fall for it! If you find NO LEGITIMATE info, well, a “Pump and dump” may explain this.
23. What does it mean to “withdraw” and “deposit” (“send” and “receive”)?
Ha, ha, ha, I know, it may sound funny to explain English words. Nevertheless, if you are just a crypto rookie, you might have a problem recognizing these terms. When I started, I actually had this trouble.
Let’s say you start with an exchange or a wallet. Whatever service you use, if it allows you to store or trade cryptocurrency, it also probably has 2 big bad buttons – buttons for Withdrawal and Deposit or buttons to Send and Receive.
To DEPOSIT funds basically means to CHARGE YOUR ACCOUNT (in the service you are using, e.g. your BTC wallet on an exchange) by sending funds to it from a place of your choosing (e.g. your BTC wallet).
- If you click this option, you will be given a blockchain address, a SEPA transfer destination information, etc. You are supposed to copy this information and send your funds to it.
- Once you want to start with an exchange, you first have to deposit some BTC (or other) funds there, so that you can use these funds to buy some other cryptocurrency on that exchange. In order to do this, you have to DEPOSIT BTC from you wallet to your wallet on this exchange.
- To DEPOSIT funds is the same as to RECEIVE funds.
To WITHDRAW funds means to TAKE OUT the FUNDS you have stored ON YOUR ACCOUNT (in the service you are using, e.g. your wallet) and send them to another place of your choosing (e.g. an exchange wallet, your another wallet).
- If you click this option, you will be given an input text field where you write you BTC address, your bank account’s IBAN information, etc.
- Once you make some BTC on an exchange (after your trading session), you WITHDRAW it from that exchange to your wallet.
- To WITHDRAW funds is the same as to SEND funds.
You DEPOSIT funds somewhere (e.g. to your wallet on an exchange) by WITHDRAWING them from somewhere else (e.g. from your private wallet)! This is the only way to initiate DEPOSIT because of how blockchain works – only YOU (the owner) can give an order to send YOUR funds!!!
24. Can I send someone any of my wallet’s public addresses?
Anyone you wish. Go ahead. Perhaps someone will even send you some BTC for your birthday!
25. Can I send or show someone any of my wallet’s private keys?
Do not show anyone! No one! Never!!!
26. Are the private keys the only thing I have to protect?
You put/write/enter the private key into your wallet (or the wallet does it for you the first time you use it), so basically, the wallet will know your private keys. Wallets usually allow you to set login and password/passphrase information as a secondary level of security and encryption. You really want to use this secondary password!
27. Is Bitcoin a “bubble”?
Ok, there is a reason why this question is almost at the bottom of the page. If you read my previous answers, it may seem that Bitcoin’s price is justifiable. Well, I do not know what price it has at the very moment you are reading this, I just believe (and hope) it is still rising.
Firstly, what is a “bubble”? I am not giving you a definition, more of an example. If people buy certain asset (e.g. a bar of gold), other people see that many people buy this asset so they buy as well. As more people buy, the price has to get higher (if someone bought for a low price, he would only sell for a higher price, otherwise there would be no point in selling). Continually, the price of this asset gets high above its TRUE/REAL/INTRINSIC value – the “bubble” starts growing. At some point, people stop buying – they recognize the asset is not really worth that much or there are just no more people willing to buy. At this point people start selling because they fear no one would want to buy the asset for its current price. When selling (and if many people sell at the same time), the price gets lower really fast – the “bubble” pops. Those who sold before the bubble popped are lucky guys. The ones who did not, not so much.
The biggest question here is how we can determine something’s TRUE value. Well, you guessed it (or not), the TRUE value of an asset is given by many qualities of this asset – its availability (if it is hard to get, it is going to cost more), its structure (if it contains other valueable assets, e.g. precious metals, boom, higher price), its appearance and other (also non-visible) factors. However, this price (no matter what it is) is influenced by the value (price) that someone is willing to pay for the asset. If a furniture manufacturer buys a pile of ebony wood, other manufacturers see the beauty of this furniture and that this furniture sells really well, they also start buying it. The seller of ebony wood will increase the price because, that way, he is going to get more profits. The possibilities of utilization define the TRUE price of physical materials/goods (like wood).
But what is the TRUE value of a cryptocurrency? Is it the price of the computers that run the blockchain, is it the price of data that is sent over the blockchain every day? Is it the millions of users who use it, the blockchain’s algorithm or the price of the cryptocurrencies’ wallets? Or is it just nothing? Hard to tell (at least for me) but they are surely worth SOMETHING, not NOTHING! However, there should always be limits on something’s price – cryptocurrencies seem to lack these limits.
So how can something non-existant (without physical form) get such high values? Good question! As I said many times already, cryptocurrencies became market assets, the technology is no longer that interesting. Most people BUY because they see an opportunity TO GET RICH, they do not buy to fund a project that could bring technological revolution. As long as people buy, the price will rise!
So, short answer, YES, it is a bubble but a super heavy METAL BUBBLE. It is not just us common folk that see the potential of huge gains, it is the large companies too. If a company decides to invest in Bitcoin, small investors cry in happiness.
Think of it as a singer with an average voice who is called (to do a concert) only to the fanciest cities in the world. All the people see him there, he is broadcast to every TV station in the world and the word about him spreads fast. This way, even with his average voice, he makes some nice songs. These songs are uploaded to Youtube and they get a billion views. Some unknown singer with a super voice singing at a local pub will never get that amount of fame. Fame is what pays, fame also pays Bitcoin. At some point this fame could get ahead of this singer and that would be the end of it. But people around him know this and they make everything possible to prevent that. And, by “people around”, I also mean giant companies which also see giant profits in it or large groups of developers always inventing new ways to make Bitcoin even more mass adopted.
It is true, there are big things planned for many cryptocurrencies in 2018, Bitcoin surely stading in the front. When the developers agree on modifications that make Bitcoin’s fees much lower and transactions much faster, it could render many other great Altcoin cryptocurrencies useless (because many of these altcoins actually came to existence by claiming they could run cheaper and faster blockchains). This would make that average singer magically become Pavarotti. And, as we all know, there was only one Pavarotti. So, yes, perhaps Bitcoin will take over everything one day again, but there is a long way ahead of us before that happens.
All of this small talk may sound as if I was talking bad about Bitcoin. Not really! Bitcoin might be a trap that is based on the people’s lust for riches and Lambos, but this also makes it a really profitable investment.
I am sure, one day, some people are going to be very sad. It could be either those that mock cryptocurrencies crying over their lost profits or the Bitcoin investors mourning the loss of their precious funds. If it is the latter, be sure to SELL that Bitcoin before the worst happens! However, I do not think it is going to be anytime soon!
28. Is it a good idea to “just” buy Bitcoin and hold it? Why would I bother with other crypto?
Now, this is a very good question. I do not see anything wrong about such a plan. I believe Bitcoin will still rise.
BUT, I do not recommend to do this (or JUST this)! You will be missing a lot of great opportunities and many “faster” ways to gain capital. In other words, BTC may bring you millions in years, trading certain coins and ICOs may bring those profits a lot sooner!
You also have to understand that Bitcoin is more of a commodity. People buy it because other people buy it. Its system has higher fees than most of the other cryptocurrencies, its transactions can take more time to get confirmed than the transactions of other cryptocurrencies. So what? Yeah, so what! It is still THAT FIRST cryptocurrency. I am not saying Bitcoin’s development will never progress, only that its current state is really nothing flawless! Ha, a rhyme again! Just bear in mind, other coins (Altcoins) may bring more revolutionary ideas and potential to the table than Bitcoin ever could! It would be a big mistake to just skip these only because you feel it is not THAT FIRST cryptocurrency.
Yeah, here is one more side note. Bitcoin stands as a trading pair to every other cryptocurrency. I have yet to see a new coin that cannot be traded for BTC, I do not think there will ever be such a cryptocurrency. So take that Altcoin as a stepping stone to get more BTC. If you find a (new or old) coin with, for example, a price of 0.0001 BTC (per piece) and buy 1000 pieces of it (you spend 0.1 BTC), this coin later starts rising and its value gets to 0.0002 BTC (per piece) and you sell it, well, you just made double the amount of BTC (1000 coins, each for 0.0002 BTC, is 0.2 BTC to be precise). If you just held that BTC, you would miss that 0.1 BTC profit. Altcoins, at least for me, represent the greatest opportunities.
So, here is my advice. Purchase BTC, hold BTC. When opportunities arise, send some BTC to crypto exchanges to buy coins that have potential or buy ICOs. Once these coins gain enough value, either sell them to get more BTC or hold them too (if you really believe in them). Rinse and repeat!
As I wrote in the previous question, Bitcoin’s “bubble” state is good for profit, but its price may at some point get low. Till this moment, every time this happened, the price jumped back up in a short amount of time (but that does not change the fact it falls). Do not be stupid and bet everything on Bitcoin! If you already purchased something and you see a big change in the chart, always set a limit SELL order to your minimal “I WOULD DIE IF THE PRICE WENT LOWER, SO I SELL NOW!” price – I talk about what SELL orders are in my trading articles HERE.
Thought it’s over, huh? No! Here’s one more future reason to buy other coins – Altcoins. Up to this point we witnessed the rise of many cryptocurrencies but the year 2017 was the sweetest for most of them. Many people will give you this advice – I was given it multiple times. You should dirversify your portfolio (portfolio of owned cryptocurrencies)! Meaning, you should have more types of coins (not just BTC) available in your wallets and hold them there most of the time, you never know which one could skyrocket. We already saw what Bitcoin did in 2017, there may be other Bitcoins right behind the corner! Some say – not me, but it seems more and more believable every day – the first half of 2018 will be the last chance to buy crypto for “low” prices. After the first half of the year, most of the people will join the crypto ranks, get into it and all the prices of all the coins will get really high. Perhaps Bitcoin will have a price of 100000 USD until then, perhaps its price will stabilize (or fall) and the other coins will prevail, perhaps governments start regulating crypto and we will all be down under, who knows. We do not know what is going to happen tomorrow, thinking half a year ahead is pure speculation. Nevertheless, I truly advise you to get into the crypto bussiness as soon as possible, my “pure speculation” is, that it will take over the world and your investment in crypto will pay off!
This is MY advice, so do not take out guns when my predictions do not get fulfilled!
29. What should be my primary source of information about crypto?
A very good question. This website, of course (being humble is my creed)!
The thing is, what I know is just a fraction of what is out there. Every cryptocurrency project may bring something new and unique, the leaps of technology are tremendous and I always find myself falling behind. Thanks to a few individuals on Reddit and Youtube mostly I learn new things every day. So should you. I also try to list the most recent sources in the HUB.
The market changes very fast, new coins are added almost every day. For news about the market, you should use Coinmarketcap.com as your source of information about current status of every currency.
30. How am I supposed to read this blog?
I was asked this question a few times already. So, here is a thorough answer.
Technically, this is not a blog, it is more of a guide. Yup, you guessed it, that is why it is called Crypto Buyer’s “Guide”!
I prefer longer complete and up-to-date posts to multiple short and scattered posts. This also means finding a RECENT post may be quite troublesome. This is because, most of the time, I will NOT ADD NEW posts, I will UPDATE THE OLD ones. Every post has a date signature which shows when it was updated the last time. The blog is based on my crypto journey, so, when I find new information, I will update the contents. And I usually update all the important posts at the same time, so these posts will always be showing as the FIRST!
Nevertheless, I would like to show (and teach) you how you are supposed to navigate this guide. That MAIN MENU AT THE TOP of this page is your friend here, you can get everywhere from there. Firstly, two images – one showing the TOP MAIN MENU on a widescreen desktop, one on a mobile screen.
- HOME gets you to the homepage which is meant for quick navigation. It is meant for new visitors as it shows the most important topics and shows you where to start.
- The centre of everything is my “HUB”. The menu button is called “CK’s HUB” because it stands for “CryptoKyril’s HUB”. CK is my American thug name, by the way. The HUB should be your first stop whenever you come to this website. I write about my recent investments and all the important news about this website. It serves as the summary of Crypto Buyer’s Guide and also as the centre of navigation (my own “sitemap” if you will) so you can navigate to every important topic/post/link from there. One more note – HUB is also always the first post on the HOME page as I update it the most often.
- Then there are “INTRO” posts, these serve as my introduction to you and, also, as your introduction to the world of crypto. This FAQ belongs to INTRO posts too! Please, read the INTRO posts, they are supposed to give you the basic idea about everything around me and crypto.
- The last thing I will mention are the “TOPICS”. TOPICS are branching starter posts. They introduce you to a specific topic about crypto, they also contain navigation to every other post talking about this topic. If you click a TOPIC and read it, it should lead you from start to finish (perhaps over multiple posts) – you do not have to look for any other posts regarding this topic because there are NO OTHER posts to look for!
I may have not shown you everything, there are a few obvious and also a few “hidden” features here and there. You should always remember, you can get everywhere from the MAIN MENU AT THE TOP of the website!
31. What do you do with cryptocurrencies, Kyril?
I am not a miner, I tried mining but it was just too much work for me to maintain the computer, let alone build the rig which was a chore of its own. I never considered cloud mining – you can actually rent a mining rig which mines for you for certain monthly payments – but I have not tried that yet so I cannot say.
I am a trader, but I am not a good day-trader. I buy coins and keep them for future sales and, when I get notified or see some wild movement on the charts, then I look into it (find information that would explain the sudden movement) and trade. I only trade on legitimate exchanges with a good history and reputation. I am never the first one to try a newly released exchange!
I used to be a lender – a cautious lender. I lent money on certain websites that I tested and profited from in the past. The sad truth is, I believe every website I lent on eventually turned up to be a scam and was shut down – however, I always managed to get my funds out (at least my invested amount and some bonus) before it happened. I do not list those scams in my articles. I must say I never lent any extremely high amounts of money, instead, I invested small and progressively reinvested my gains. And NO, I was never a referral or an affiliate to any of those websites.
I am a holder (hodler), I find information about new currencies or ICOs every single day and, based on my research, buy those ones I like – in the amounts I believe could get some profit.
32. How do you know all these things, Kyril? Are you so clever?
No, I am not. I am a lazy person first and foremost but I read here and there, I try to learn. I do not guarantee that my knowledge is absolute and you will not find a mistake or a place for “better” explanation. This is how I consider things, I do not like complicating things, and it worked for me so far.
More extensive knowledge requires more reading, much more – search Google, Reddit, watch Youtube, buy books about cryptocurrencies (I would probably never buy a book to read about this but someone surely would), study Bitcoin’s or any other blockchain.
Learn, adapt, ovecome!
33. I love this guide, Kyril, I want to help. Can I make a donation?
Yeah, yeah, I know, I must have made this question up. Well, you are very mistaken. I was already asked this question at least twice. Yeah, twice! I do not think anyone donated afterwards (not that I am making it easy), but, as someone asked, here’s my answer.
Yeah, sure, the Donate page is HERE. Maybe you should check it out before reading on.
I did not make this website to ask for donations. Nevertheless, I would not deny support (or a beer). If someone’s gratitude or generosity can really go this far, perhaps this someone would not deny making one more step and play a little game first. Go to ENIGMA page of this website and, once you finish it, you will be rewarded with (among other things) a set of blockchain addresses that I created solely for donations. If you decide to make a donation after you finish, I thank you very much – please, also write me in the provided contact form or the contact form HERE (NO need for a real name if you like staying anonymous!) so that I can express my thanks. If you do not, no worries. One way or another, I hope you have fun playing!
P.S. Based on the success of this “game” I will add more content to it, so, if you like it, be sure to check that page once in a while. Also, I am always open to suggestions, so get in touch!
34. How do I finally leave this FAQ and continue to the next article?
Well, use this link, of course!