A Complete Guide to Cryptocurrency for Beginners
If you’ve ended up on this page, then there’s a chance that you’ve caught wind of the massive cryptocurrency buzz sweeping the world. Over the last year, cryptocurrencies like Bitcoin and Ethereum have gone from being relatively unknown to household names.
For those of you looking to learn about cryptocurrencies, you’ve come to the right spot. We’ve developed this detailed beginner’s guide on digital currencies so that folks with little to no experience with these currencies can learn about them from the ground up.
In the sections below, we’ll walk you through the basics, including what cryptocurrency is, how it works, common terminology, and more. By the time you finish reading this page, you’ll have a good basic understanding of cryptocurrencies. If you don’t want to read the entire document and would prefer to jump to a particular section, you can use the jump links below to hop to the parts that interest you the most.
What Is Cryptocurrency?
At a very high level, cryptocurrency is a type of digital currency that is created through the use of computer coding. Even though it is a form of currency, there isn’t any physical money like we’re used to with traditional coins and dollars. Instead, all cryptocurrencies reside in the digital space and can be sold, transferred, or exchanged for goods and services.
As you’ll see in the sections below, there’s a ton that you can do with these digital currencies. From buying cars to paying for your meals, cryptocurrencies like Bitcoin are becoming more usable every day as more retailers and restaurants are willing to accept these funds as payment.
Cryptocurrencies have many benefits over traditional money. Some of the most notable ones include that it is decentralized, fast, secure, and globally accepted. It’s for these reasons and more that many folks are beginning to adopt the use of these currencies.
As you can probably imagine, cryptocurrency is a pretty complicated thing. There’s much more you can learn if you’d like to go deeper down the rabbit hole. Here is a link to an excellent piece from Blockgeeks that has an in-depth explanation about cryptocurrencies.
How Does It Work?
We could write an entire article about how cryptocurrencies function. Instead of boring you with a long page of text, we’ve instead included an incredible infographic below from Blockgeeks. This image will give you an excellent high-level overview of how digital currencies function. If you’d like to learn more about how they work, don’t miss out on the link to Blockgeeks just above.
Popular Cryptocurrencies
If you’re new to the world of cryptocurrencies, one of the things that you should know is that there are a ton of different ones in existence. Currently, there are over 2,000 different cryptos available. However, the majority of these are unknown to most folks. We’ve dedicated this section to three of the most popular cryptocurrencies that currently exist.
Bitcoin
Considering the fact that Bitcoin was the first ever cryptocurrency, it’s only right that we lead off talking about it. In 2009, Bitcoin was initially released to the public for purchase. Since then, Bitcoin has exploded in popularity and is still the most popular digital currency. On top of its popularity, it also has the most massive market cap of all other cryptocurrencies.
Ethereum
Another popular cryptocurrency is Ethereum. However, unlike Bitcoin, Ethereum is a relative newcomer in the digital currency space, having been founded in 2015. Despite its young age, Ethereum has rapidly risen to one of the most popular cryptocurrencies in the market.
Litecoin
With roots dating back to 2011, Litecoin is another popular cryptocurrency. Litecoin was developed by a Google employee and has a notably faster transaction processing time than Bitcoin.
As we mentioned earlier, there are over 2,000 different cryptocurrencies available. If you’d like to view the full lineup of options outside of the three major ones that we’ve covered above, you should check out the following link. On this page, you’ll be able to see all existing digital currencies and information about their current price, market cap, and price trends.
The History of Cryptocurrency
Many folks don’t have a clue about how or why cryptocurrency first came about. The idea behind it actually traces back to the early 1980s. However, it wasn’t until 2009 that the first digital currency, Bitcoin, was launched. Since then, thousands of other cryptocurrencies have launched, and there doesn’t appear to be any sign that things are slowing down anytime soon.
The basic idea and premise of cryptocurrency is that it is decentralized. That means that no government or other organization has control over the digital currency. Along with that, one of the other primary goals was to make the use of cryptocurrencies anonymous.
If you’d like to learn more details about the history of cryptocurrency, be sure to check out the link below. It will take you to our page with a vast explanation about the history of digital currency so that you can deepen your knowledge on how things have progressed since cryptocurrencies first began.
In addition to our detailed page about the history, we’ve also built a page dedicated to why people started using cryptocurrency. If you’re looking for more color on this subject, then be sure to click on the link below to visit this insightful page.
Common Cryptocurrency Terms
As you begin your journey into the exciting realm of cryptocurrency, you’ll want to have an understanding of some common terminology. Below, we’ve provided definitions of common terms that you’ll come across when dealing with the digital currencies.
Exchange
In the cryptocurrency world, an exchange is merely a place that you can buy or sell cryptocurrencies. Exchanges for digital currencies like Bitcoin operate through websites. One of the most popular exchanges for cryptocurrencies is Coinbase. If you’d like to check out their exchange to see what it looks like and how it operates, we’ve included a link below in the next section
Altcoin (Alt)
An altcoin is simply any other cryptocurrency that’s not Bitcoin. Also sometimes known as an alt, these coins are viewed as alternatives to the original cryptocurrency, Bitcoin.
ICO
ICO is short for initial coin offering. These take place any time that a new cryptocurrency is introduced to the market. Essentially, an ICO is the first time that the general public can purchase a new digital currency. If you’re familiar with IPOs (initial public offerings) in the stock world, ICOs follow the same general structure and logic.
Market Cap
The term “market cap” is used to represent the total value of a cryptocurrency as a whole. To calculate the market cap, you just multiply the current value of a coin by the existing number of coins in circulation.
Blockchain
This is the type of technology that significant cryptocurrencies like Ethereum and Bitcoin use in the process of managing their currency. In short, the blockchain is a series of ledgers showing every transaction for that currency. However, the primary thing with these ledgers is that they are highly secured through the use of cryptography. Instead of this sensitive data being stored on a lone server, it has copies across thousands of computers around the globe.
Keys
Since cryptocurrencies operate through the use of cryptography, keys are a common aspect of working with them. Specifically, you’ll have public keys and private keys. The public keys are what you’ll use to have people send you a new cryptocurrency. These are keys that you don’t need to be very careful with. It’s your private keys that you need to secure and store in a safe place so that you don’t lose them. With these private keys, you’re able to access your digital currencies and sell them or send them to other individuals. Without your private keys, you won’t be able to access your funds.
Wallet
While the idea is generally the same as the wallet you may have in your pocket right now, cryptocurrency wallets differ in their own way. Instead of being a physical wallet, these wallets act as a place for you to safely store the keys to any cryptocurrencies that you own. You can choose to use a software wallet that resides on your computer, or you can utilize a hardware wallet, which is a specialized USB stick for secure storage of your keys.
How to Buy Cryptocurrency
These days, it’s relatively simple to purchase cryptocurrencies using one of two primary methods. You can either purchase coins from an exchange, or you can get them from a cryptocurrency ATM. No matter which one you use, it’s a quick and easy process.
The most popular way for folks to purchase digital currencies is through the use of an exchange. Cryptocurrency exchanges are much like a stock exchange in that they are a place where you can buy or sell crypto funds. If you’d like to check one out, we’ve added a link to Coinbase, one of the most significant exchanges for cryptocurrencies in existence.
If you’d like to purchase somewhere other than an exchange, then you can use a digital currency ATM. Spread around the globe, you can use these machines to pick up different cryptocurrencies like Bitcoin. Instead of walking away with actual money, you’ll instead receive confirmation and the private keys that you can use to sell or transfer your crypto funds at a later date. We’ve included this link that will show you all of the cryptocurrency ATMs near you if you want to buy some using this method.
Cryptocurrency and Online Gambling
One of the earliest mainstream adopters of cryptocurrency was the gambling industry. What’s nice about this is that it allows online gamblers a broader assortment of payment methods to select from when they are making deposits or withdrawals from a betting site. We’ve included this section, as it’s the primary focus of our website, and it’s something that we’re very passionate about.
If you’re interested in betting on sports or casino games online using cryptocurrencies, then don’t miss the links below. On these pages, we’ll provide you with more information about how you can use these digital currencies for your online gambling. Also included on the pages are our top picks for the best online sites to use for Bitcoin. You can select below from a page dedicated to sports betting sites or one dedicated to online casinos. Just click on the one that you’d like to learn more about.
Other Things You Can Do with Cryptocurrency
Besides being able to do online gambling, there’s plenty of other things that you can do with cryptocurrencies. In this section, we’ll detail some of the alternatives that you’ll have at your fingertips if you decide to buy and hold some of these digital currencies.
Purchase Cars
If you end up holding a substantial portfolio of cryptocurrencies, one of the things that you can do is purchase a car with it. Instead of showing up and paying with a loan or cash, some buyers have paid for cars in full using Bitcoin and other alt coins. Lamborghinis have become immensely popular with cryptocurrency millionaires that hit it big thanks to their crypto investments.
Around the globe, there’s a good list of car dealerships that will accept cryptocurrencies as payment. If you’re in the market to purchase a new car using cryptocurrency funds, or if you’d like to see which dealerships are out there that accept digital currency, a simple Google search can provide you with a list of dealerships near you that accept cryptocurrencies.
Buy Homes
Another option is to use cryptocurrency funds to purchase real estate. As with the cars example above, you’ll need a pretty hefty crypto portfolio to execute on buying a home. However, it has been done, and many real estate sellers around the globe are now accepting digital currencies as a form of payment. For those of you seeking to buy a home using your crypto funds, you can use Google to locate properties around the world that can be purchased using your digital currency.
Shopping
If your crypto portfolio isn’t big enough yet to purchase homes or cars, you’re still not out of luck. Something else that you can do is retail shopping with your cryptocurrency funds. Currently, many online and traditional brick-and-mortar retailers accept digital currencies as a form of payment.
In the online space, there are lots of web retailers that take cryptocurrencies like Bitcoin and Ethereum. However, the majority of them are smaller retailers that you’ve probably not heard of. Luckily, there are a couple of major retailers that have stepped up to the cryptocurrency plate. Most notably, both Overstock.com and Etsy.com will accept digital currency as a form of payment in check-out. Unfortunately, Amazon hasn’t opened up to crypto payments at this time.
If you don’t do all of your shopping online, then you may also be able to spend some of your cryptocurrency funds in a brick-and-mortar retail shop. Currently, the retailers accepting this form of payment are mostly smaller ones. However, we expect that the number of retailers allowing customers to pay using cryptocurrencies will continue to increase. You can use the following link to find a map of all of the retailers near you willing to accept digital currency funds as a form of payment.
Eat Out
Lastly, you can pay for your food with crypto funds. Similar to the brick-and-mortar retailers, many restaurants globally are now accepting cryptocurrency as a form of payment. Using the link above to CoinMap, you can locate restaurants in your neighborhood that allow you to use digital currency to check out.
The Benefits and Risks of Using Cryptocurrency
Another thing that we wanted to cover on this page relates to the benefits and risks of using cryptocurrency. We’re here to give you a good look at both sides of the coin so that you know both the potential good and bad that could come with it. It’s vital that you check out this portion of the page so that you understand precisely what you may be getting yourself into.
Up first, let’s take a look at some of the risks associated with cryptocurrencies. One of the main dangers of digital currencies is that their prices are very volatile, meaning that the prices can change rapidly in either direction. In addition, there is always the possibility that the value of a crypto can become worthless.
Another risk associated with cryptocurrency is that there is a risk of your coins being hacked. With everything being digitally based, there is always a possibility that someone could gain access to your crypto funds and steal them. To help reduce the likelihood of this, make sure that you’re using some form of cryptocurrency wallet. We’ve got a link where you can learn more about wallets in the next section of additional resources.
If you’d like a more expanded explanation of the risk of using cryptocurrencies, we’ve built a page dedicated to just that. By using the link below, you can gain a deeper understanding of all of the potential downsides associated with using digital currencies.
Next, let’s focus on some of the benefits of cryptocurrency. One of the significant benefits of cryptocurrencies is that they provide easy access for many individuals and it can be spent globally. Unlike traditional currency that’s only able to be used in a specific country or region, cryptos can be used around the world.
Another great benefit of digital currencies is that they provide very fast settlements. Compared to other payment forms like bank wires and checks, cryptocurrency can settle transactions in as little as a matter of moments. This helps speed up things for folks using cryptocurrencies to transact buying and selling.
While we’ve highlighted some of the benefits of cryptocurrencies here, this is not an all-inclusive list. To view more detail about the benefits of using digital currency, be sure to check out the link below. Here, we’ll provide you with a broader list of potential benefits.
Another benefit of cryptocurrency is that it is beginning to replace other currencies. Much of this is thanks to the fact that cryptocurrencies can be sent and spent around the globe, unlike traditional currencies which tend to be tied to a specific country or region of the world. If you’d like to read more about how digital currencies are replacing traditional currencies, don’t miss our write up below. To read this interesting piece, click on the link below.
Additional Resources
In addition to all of the information we’ve already provided above, we also wanted to bring you a lineup of additional resources about cryptocurrencies. By using these guides below, you can broaden your knowledge and understanding of cryptocurrency.
Cryptocurrency FAQ Page
If you still have questions after checking out this page, don’t miss our cryptocurrency FAQ page. Here, you’ll find an expanded assortment of questions that we commonly hear about cryptos. To view this list of additional questions, click the link below.
Guide to Cryptocurrency Wallets
We’ve built out a detailed guide dedicated to cryptocurrency wallets. If you’re wondering what they are or how you can go about finding one to use, then you’ll definitely want to check this page out. Just click below to head over to our cryptocurrency wallet guide.
How to Mine Cryptocurrency Guide
Many of you might be thinking about mining cryptocurrencies. Before you purchase equipment to get things started, make sure that you view our guide on how to mine cryptocurrency. Here, we’ll give you a full understanding of what you can expect, from high electricity bills to the massive amount of heat output.
Conclusion
We hope that you’ve gathered up a solid fundamental understanding of cryptocurrencies using our beginner’s guide. If this is the first time that you’ve visited our page, consider taking a minute to check out the other valuable resources and guides that we have to offer. You’ll find a nice collection of cryptocurrency and gambling-related information that you can use to elevate your knowledge. Thanks for reading, and good luck in all of your future cryptocurrency investing adventures!
Cryptocurrency Frequently Asked Questions
Hopefully, we’ve helped you answer all of your questions using the information and resources above. Just in case, we’ve also included a handful of FAQs below that readers have submitted about cryptocurrency. To view the answer to one of the questions below, all you have to do is click on the question, and the answer will appear for you.
What happens if I lose my private cryptocurrency keys?
Unfortunately, if you lose your private keys to your cryptocurrencies, then you’ll lose access to them forever. These private keys are essential for you to sell or transfer your coins. There is no way for anyone else to help you recover them.
Because these keys play such a vital role, it’s crucial that you take the proper steps to record and safely store your keys. Instead of saving them on your computer where they could potentially be hacked, we’re big fans of using old-school pen and paper. What we’d suggest is writing your private keys down on a few pieces of paper and then storing them in different secure areas. That way, if you misplace one, you’ll still have some others. You might consider placing them in a safety deposit box, home safe, or other secure areas within your home.
An alternative for you is to use a cryptocurrency wallet. These come as either software or hardware formats. In both forms, these wallets are designed to help you securely store your private keys.
Is cryptocurrency a smart investment?
Unfortunately, we can’t give a global answer here, as everyone’s financial situation is a bit different. What we can tell you is that investing in cryptocurrencies is very risky. If you own some of these currencies, you should expect to see large swings in the value of your coins on a regular basis. Many people don’t like significant changes like this, and if you’re in that bucket, then you may want to sit out on investing in cryptocurrencies.
There are tons of individuals that have made a lot of money by investing in cryptocurrencies. However, the majority of them bought coins in the early phase of one of the cryptos. While it is possible to make money in the short term, you might consider looking at things as a more long-term play. If you purchase some coins now and hold onto them for a more extended period, there’s a chance that they could be worth lots of money or nothing in the future. Unfortunately, we don’t have a crystal ball that tells us what the future of digital currency values will look like.
Do all online sportsbooks and casinos accept cryptocurrency?
No. Not all online sportsbooks and casino accept these digital currencies. Luckily, plenty of them do. If you’d like to do your online gambling using cryptocurrencies, check out the section above about online sites and cryptocurrency. There, you’ll find more information and a link to a page where you can see our recommended sites that allow you to transact using cryptos.
Can I lose money investing in cryptocurrency?
It is possible to lose money while investing in cryptocurrencies. As with other investments like stocks and bonds, there is always a risk of losing some or all of your investment. Unfortunately, there is no such thing as a sure bet. If you decide that you’re going to invest in digital currencies, be sure to keep this in mind as you make your buying choices. Due to the high-risk nature of these investments, we’d suggest that you only allot a small portion of your investment portfolio into cryptocurrencies while investing the remainder in more stable investment options. In short, don’t put all of your eggs into a digital currency basket.
Is cryptocurrency illegal?
At this point, cryptocurrencies are unregulated, meaning that they are not illegal. Governments around the globe have yet to put in laws and rules governing these digital currencies. However, we expect that will change sooner rather than later. Unless you’re using cryptocurrency for something that’s illegal such as drug trade or ransom requests, then you should not have any problems.
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