DETROIT – Whenever the crypto market is in the news for whatever reason, there’s a discussion about whether it’s too late to get involved. After every market spike or crash, when a new trending coin is released, when governments are discussing the possibility of regulating crypto or releasing their own official coin, or while discussing the industry’s environmental impacts – all of these moments are treated as opportunities to trick people into thinking they missed their chance.
The reality is that the cryptocurrency market is incredibly volatile, so good times to invest come around pretty regularly. Even if you are not interested in investing in cryptocurrencies, it is increasingly important to know about them. It may have started as a niche movement, but cryptocurrencies have gone mainstream and don’t seem to be going away anytime soon.
This article will go over the basics of cryptocurrencies, from different coins and wallets to all things environmental concerns. In the end, I hope you will feel confident enough to talk about it when the subject is brought up and inspired to do further research on the subject.
Types of cryptocurrencies
Bitcoin and Ethereum are the best known and most traded cryptocurrencies. All cryptocurrencies exist on a blockchain, a system that stores information in a highly secure and non-modifiable way. It is, in the simplest terms, a digital ledger.
The OKX cryptocurrency list gives an indication of the number of cryptocurrencies currently mined and traded. Many alternative parts have fairly short lifespans. There are also meme coins, such as Dogecoin. These were created as a joke initially, but some of them have had some success.
Stablecoins are another type of cryptocurrency. Unlike Bitcoin and other typical cryptocurrency coins, stablecoins are non-volatile and tied to a specific currency. Despite their name, not all stablecoins are created equal. There have been issues with some stablecoins due to increased market pressure and the way they have been set up.
Types of wallets
Cryptocurrencies are stored in digital wallets. There are two types of wallets: hot and cold. A hot wallet is connected to the internet and is used to make transfers, while cold wallets are used to store crypto. Both are essential. The hot wallet allows you to exchange and receive coins and the cold wallet is the safest way to store your coins.
Mining is how cryptocurrency coins are created, but it is a time-consuming process that requires specialized computer equipment. These days, most people acquire cryptocurrencies by buying them on an exchange. These exchanges allow users to use government-issued currencies or fiat currencies to buy cryptocurrencies and also allow them to trade between different types of cryptocurrencies.
Since crypto is a decentralized market, these exchanges are essential. They provide a secure and relatively stable platform and make the whole process of investing in cryptocurrency simple and easy to follow.
Proof of work or proof of participation?
When cryptocurrency is mined, the process involves verifying blocks of data before they are added to the chain. Traditionally, this was done by solving a complex mathematical puzzle. This process is known as proof of work and uses a significant amount of electricity.
There is an alternative to the proof-of-work protocol, known as proof-of-stake. It consumes much less electricity but remains very secure. Initially, only smaller coins were upgraded to proof-of-stake. This month, Ethereum completed a proof-of-stake test and will transition to the new protocol later this year. This is a massive positive move for the cryptocurrency world.
Global climate change has been the greatest threat to the planet for decades and it is finally being taken more seriously by governments and individuals around the world. Digital alternatives to traditional habits and products are often hailed as a more sustainable option, for example ordering items online instead of traveling from store to store reduces emissions. Moving to proof-of-stake is another big step that will help the environment.
If you’ve done any reading on crypto, you’ll have heard references to shoves or shoves. These have unfortunately become more common as the market has expanded. A carpet pull occurs when a new cryptocurrency is heavily promoted to inflate the price – usually by a social media influencer who has been paid to promote it. The original holders of the coin sell off as the price rises and new investors end up with a coin that has little real value.
This is not a problem caused by crypto, rather it is a problem with unscrupulous individuals who take advantage of the trust fans place in influencers and the excitement surrounding crypto investing.
This article was provided by david harrison