Everything You Need To Know To Get Started With Crypto

Everything You Need To Know To Get Started With Crypto

By Voyager's Charlotte Siller, provided exclusively to Benzinga Cryptocurrency.

Ready to get started in the world of crypto? The future of finance is exhilarating and there’s no reason you shouldn’t be a part of it. You’ve got the power, so what tools do you need to dive into this exciting financial landscape?

1. Get the Lay of the Land

What is crypto?

Cryptocurrencies are forms of digital money that are created and transacted on the blockchain. Each different blockchain has its own network of nodes (computers) run by validators (people) who keep the network honest by verifying and keeping track of network user transactions. Basically, if Pat sends Kate crypto on the network, validators confirm that the transaction happened and the transaction becomes a part of the digital ledger.

Each network uses its own way of validating transactions, known as consensus protocols, that dictate who gets to validate transactions on the network and how. Some networks use mining, others use staking or time stamping.

How do people buy/sell it?

Originally, you could only invest in crypto through cryptocurrency exchanges or DEX’s that require hot or cold wallets, public and private keys, and extensive knowledge of crypto to access. In our more mainstream crypto market, you can use crypto trading apps, like Voyager, to trade crypto easily without having to store or keep track of private keys. Voyager also has access to several different exchanges to automatically source you the lowest cost on every trade, so there’s no need to shop around for the best price.

2. Learn What’s Out There

Crypto can be looked at in two different segments: Bitcoin and altcoins. Basically, because Bitcoin dominates the market, it has its own category. The title altcoin refers to any cryptocurrency that isn’t Bitcoin. There are many types of altcoins available on the market today, but here are some of the most popular:

Smart contracts

Smart contracts are just like tangible, everyday contracts, but they are completely algorithmic and programmed to execute automatically on a blockchain. In the world of crypto, smart contract assets run on their own networks which operate as foundations for people to perform transactions, build independent networks, and exchange a wide variety of assets.

Decentralized finance (DeFi) 

DeFi, short for decentralized finance, represents a segment of the crypto sphere that focuses on peer-to-peer transactions and digital finance. By harnessing the efficiency and power of smart contracts, DeFi platforms create a space for lending, borrowing, trading, saving, and earning interest that doesn't require all of the usual bureaucracy and paperwork.

Stablecoins

Stablecoins are cryptocurrencies that are static in value and pegged to a fiat currency (normal money, like dollars). Stablecoins are usually backed by fiat currencies and have sister assets that experience normal market volatility to keep the stability balanced.

3. Speak the Language

While the crypto market might resemble the Stock Market in some ways, crypto has its own terminology and knowing the terms will help you navigate the market with ease:

Blockchain

Blockchain is a technology that lets you agree about data with anyone on the Internet, enabling free trade worldwide without the need for banks or middlemen. Because of this, blockchain lets something digital have scarcity, enabling you to create, trade, and value digital assets (such as cryptocurrencies, or crypto for short). Importantly, cryptocurrencies are built using blockchain technology, but they’re not the only usage of this new tech. You’ve probably heard of some cryptocurrencies that use blockchain, such as Bitcoin, Ethereum, and Dogecoin.

Decentralized apps (dApps)

Decentralized applications (dApps) and exchanges built and run on the DeFi (Decentralized Finance) network.

Layer 1

The foundational platform for crypto assets. For example, Ethereum and Bitcoin are both Layer 1 protocols. DApps and Layer 2 scaling solutions are built on top of Layer 1 platforms, similar to how webpages and web applications are built on top of the Internet’s core architecture.

Protocol

A set of rules that enables data to be shared between computers. For cryptocurrencies, a series of protocols enable the structure of the blockchain; a decentralized database that allows digital money to exist and be securely transferred all around the world using the internet.

Public address (or wallet)

Sometimes known as a wallet address, the address to which people send each other crypto. It usually looks like a long string of randomly generated numbers. It’s okay for someone to know your public address, and sharing it won’t endanger your funds.

Public key

A numerical code, also known as a wallet address, serves as a means to identify transactions and send or receive crypto through open channels that are less secure.

Private key

A numerical code that decrypts data in transactions, allowing for the safe transfer of crypto funds. You should never share your private key with anyone because it will give them direct access to your funds. Keep your private key private because this is essentially the password to your wallet.

Proof of Work (PoW) and Proof of Stake (PoS)

Consensus protocols allow users to act as validators on the network by either ‘mining’ or ‘staking’ their crypto on the network. Both Proof of Work and Proof of Stake networks issue rewards for nodes (computers) contributing to secure the network, but Proof of Stake is quickly becoming favored as it uses far less energy. Depending on the exchange you use, you may receive a portion of the rewards.

These are just some of the more common terms you’ll come across in the world of crypto. Continue learning the lingo and you’ll easily be able to uncomplicate crypto and unlock the open financial system. 

4. Remember How Far Crypto has Come

The past decade of mainstream adoption and asset expansion has managed to both increase and polish out the kinks of the crypto market. With more competition from newer coins came more solutions, more ideas, and more ways to improve upon blockchain technology.

More diverse

Bitcoin started the crypto market in 2009. Now, there are over 8,000 cryptocurrencies available on the market. With so many choices, it is impossible not to find a crypto that suits your needs or interests, including but not limited to sports, art, education, philanthropy, and gaming.

More sustainable

New proof of stake consensus protocols are making validating on blockchains an altogether greener process. Proof of work protocols require constantly running machines that are tailored to the task and highly energy consumptive.

Now, developers are creating new protocols that eliminate the need for mining and make network validation more environmentally sustainable, such as proof of stake (staking assets on the network) and proof of history (using timestamps to verify transactions)

More secure

With regulation comes more security and more ways to protect your assets. Horror stories abound of people who lost private keys in the old days due to poor storage or phishing scams. Now, you can buy crypto through apps that offer built-in technology and 2-Factor Authentication for added layers of security.

How do you get started?

The Voyager app is here to help you kick-start your crypto journey. With over 60 assets available to trade and an unmatched number of altcoins on the app, you can dive into the world of crypto with the security, knowledge, and investment tools you need to feel confident in every step. 

Receive $50 in Bitcoin when you sign up using code ZING on Voyager, deposit at least $100, and make your first trade. You can also earn up to 12% annual rewards when you maintain a minimum monthly average of any eligible asset in the app.

Get started, you’re ready.

About Voyager

Voyager Digital Ltd. VYGRVYGVFUCD) and its subsidiaries (“Voyager”), is one of the fastest-growing, publicly-traded digital asset platforms in the United States. With over 60 digital assets, featuring a wide selection of altcoins, Voyager offers a secure way to trade using its easy-to-use mobile application. Voyager uniquely offers users the ability to earn annual rewards for maintaining a minimum balance in more than 30 different digital assets. Voyager was founded in 2018, to bring a more transparent and cost-efficient solution to trading in digital assets. Through its subsidiary Coinify ApS, Voyager provides digital asset payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com. Use code ZING during app sign up and get $50 in BTC after depositing $100 and making your first trade.

Voyager Cryptocurrency Risk Disclosure

Investment Advice Disclosure: This content is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for digital assets, sectors, or future price movement predictions.

Photo by Karolina Grabowska from Pexels

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The content was purely for informational purposes only and not intended to be investing advice.

 

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