Getting Started

Cryptocurrency for Beginners

Questions & Answers

The value of cryptocurrencies are dependent on the market, where the prices

of various cryptocurrencies vary a lot and is one of the most fluctuating and

volatile markets to date.

The price of cryptocurrencies like any other products is dependent on demand

and supply. If more people demands a particular currency and it is short in

supply, then the value increases. More units are mined by miners to balance

the flow. However, most currencies limit the supply of their tokens.

For instance the total amount of Bitcoin issued is only 21 million. Therefore

Bitcoin’s supply will decrease in time and will reach its final number by 2140. It

also explains why Bitcoin’s value is higher as compared to other

cryptocurrencies.

The reason why cryptocurrenciesare such in demand right now is because

Satoshi Nakamoto successfully found a way to build a decentralized digital cash

system.

What is a decentralized cash system?

A decentralized system means the network is powered by its users without

having any third party, central authority or middleman controlling it. Not the

central bank or the government has power over this system.

The problem with a centralized network in a payment system is the so called

“double spending”. Double spending happens when one entity spends the

same amount twice. For instance, when you purchase things online, you have

to incur for unnecessary and expensive transaction fees. Usually, this is done

by a central server that keeps track of your balances.

This is most commonly known as the Blockchain Technology. Cryptocurrency is

derived from the word “Cryptography”, which refers to the consensus-keeping

process secured by strong cryptography.

Blockchain technology functions in managing and maintaining a growing set of

data blocks, and this is by using the decentralized or known as the P2P (Peer to

Peer) network. In blockchain, once a piece of data is recorded it cannot be

edited or changed.

To put it in simpler terms, it enables you to send a gold coin via email. The P2P

network is a consensus network, which allows a new payment system and the

transactions of new digital money.

Let’s illustrate an example. Cryptocurrency like Bitcoin consists of its own

network of peers. Every peer has a record of the complete history of all

transactions as well as the balance of every account.

By the end of every transaction and upon confirmation, the transaction is

known almost immediately by the whole network. A transaction includes a

process where A gives X amount of Bitcoins to B, and is signed by A’s private

5

key. After signed, a transaction is broadcasted in the network. The information

is sent from one peer to every other peer on the network.

Confirmation is a critical stage in the cryptocurrency system. Confirmation is

everything. When the transaction is not confirmed, it has the possibility of

being hacked and forged.

When a transaction is confirmed, it is set in stone. It can’t be reversed, it is

impossible to be hacked, it is not forgeable as it is part of a permanent record

of the historical transaction: The Blockchain.

The blockchain can be likened to an online ledger, where all transactions are

recorded and made visible to the whole network.

This comes to show that cryptocurrencies are not secured by people or trust,

but by complex mathematical equations. It is very secure and it’s highly

unlikely that the address of a currency is compromised.

Only miners are able to confirm a transaction. This is their role in the

cryptocurrency network. They record transactions, verify them and disperse

the transactional information in the network.

For every completed transaction monitored and facilitated by the miners, they

are rewarded with a token of cryptocurrency, for instance with Bitcoins.

Since miners play a major role in the cryptocurrency system, let’s look at their

role in more detail.

What Are Miners Doing?

First and foremost, principally anyone can be miner. Miners are needed

because of the nature of the decentralized network where they have no

authority to delegate tasks and the cryptocurrency needs some kind of system

to prevent any form of network abuse. For instance, a person may create

thousands of peers and spread forged transactions. It will disrupt the system

immediately.

In

order for you to be a miner, you would need to solve a cryptologic puzzle

which is a set of very complex mathematical questions set by Satoshi

Nakamato himself. If you successfully solved the puzzle, as a miner you can

build a block and add it to the blockchain.

The miner is also given permission to add a crypocurrency transaction to the

system which automatically grants him a specific number of bitcoins. This is

the only way to create valid bitcoins. Bitcoins can only be generated if a miner

can solve a cryptographic puzzle. The level of difficulty increases with the

amount of computer power the miners invest.

Cryptocurrencies can be spent for different purposes and the best part is, all

transactions are completed online! There are 3 different transactions that can

be performed when using cryptocurrency:

1. Bitcoin Trading

2. Personal Spending

3. Crowd Funding

Firstly is Bitcoin trading.

Bitcoin trading can be very profitable for both professionals and beginners. The

market is new, where arbitrage and margin trading is widely available.The

currency’s high volatility has also played a major role in bringing new investors

to the trading market.

Compared to other financial currencies, Bitcoin has very little barrier to entry.

If you already own Bitcoin, no verification is required and you can start trading

almost instantly. Moreover, Bitcoin is not fiat currency. This simply means the

price is not related to the economy or policies of any single country.

And unlike stock markets, there are no official Bitcoin exchanges. Instead,

hundreds of Bitcoin exchanges operate 24/7 around the world. Because of no

official exchanges, this results in no official Bitcoin price where the currency is

known for its rapid and frequent price movements.

Secondly is personal spending. You can use Bitcoin to purchase almost

anything! From buying cars to travelling the world.

Cryptocurrency also provides the chance for you to give back to society. How?

By crowd funding. You are able to be part of someone’s success story by

donating to a crypto crowd funding project. Companies such as Lighthouse

have built their crowd funding platform using Bitcoin.

The perks of donating through this system are you will not be charged for your

donation and funds will not be released unless the project meets its criteria.

You are also able to withdraw from the campaign before its completion.

You have complete control over the donation! Examples of successful funding

campaigns are from Dogecoin, which includes campaigns run for Nascar driver

Josh Wise.

This is one of the most frequently asked questions out there. What is

cryptocurrency? To make it simple, cryptocurrency is a digital version of money

where the transactions are done online. A cryptocurrency is a medium of

exchange just like your normal everyday currency such as the USD, but

designed for the purpose of exchanging digital information through a process

known as cryptography.

The first ever-successful cryptocurrency emerged from the invention of

Bitcoin, by Satoshi Nakamoto. This was then followed by the birth of other

types of cryptocurrencies competing against Bitcoin.

Apart from cryptocurrency being very secure and is run through a

decentralized network, there are other properties which projects why

cryptocurrencies may be the most talked about topic in town. It has also been

considered as potentially an investment vehicle, which may garner massive

returns.

Have you heard of Erik Finman? The teenage Bitcoin millionaire who started

picking up Bitcoin at only $12 a piece back in May 2011, when he was just 12

years old. He received the Bitcoin as a tip from his brother and a $1000 gift

from his grandmother.

He now reportedly owns 403 Bitcoins, which holds a value of roughly $2,600

where it has accumulated to a stash of $1.08 million and change.

There are various concrete reasons why you should invest in cryptocurrency.

But let me give you a brief summary on the perks of buying cryptocurrency.

Firstly are its transactional properties. Cryptocurrency transaction is fast and

global. Transactions are propagated immediately in the network and are

confirmed within minutes. Since the transactions are managed by a global

network of computers, they do not take into account your physical location. It

is possible for you to send your cryptocurrency to someone in your vicinity, or

even if they are living on the other side of the world.

Secondly are their monetary properties. The currencies are in controlled

supply thus there is a high chance that the value of the currencies appreciates

over time. As mentioned earlier, Bitcoin will somehow reach its final number

somewhere in 2140.

Third is their revolutionary property. You have more control of what is going

on in your account and how the system works and operate. This is due to the

decentralized network of peers which keeps a consensus on account balances

and the transactions made. As compared to your physical bank account, which

can be changed and controlled by people you don’t see and governed by rules

you don’t even know?

Statistics

Last Update: December 2017 Source: Blockchain.info

16 Million - Total Amount of BTC
21 Million - Maximum Amount of BTC
443,500 - Daily Transactions
230000 - Bitcoin Market Cap (Million $)
19,700 - Number of BTC Users (Thousands)

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But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.

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But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.

But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.

No one rejects, dislikes, or Default Link Color because it is pleasure, but because those who do

But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.

But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.

No one rejects, dislikes, or Default Link Color because it is pleasure, but because those who do

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But I must explain to you how all this istaken idea of denouncing pleasure and praising pain was born and I will give you a complete ccount of the system and expound the actual teachings of the great explorer of the truth, the master-builder of human happiness.