Things to know before starting the crypto trading journey

Things to know before starting the crypto trading journey

If you are interested in investing in crypto or bitcoin, you should learn about the functioning of bitcoin. You will read it as a gateway to know bitcoin, cryptocurrency, wallets, blockchain, and much more in great detail! Not just investing in crypto, while firmly reducing risk by knowing the outline, mechanism, and future of bitcoin.

What is cryptocurrency? 

Knowing this will help you understand bitcoin more deeply. Cryptocurrencies are also called “crypto-assets.” The history of cryptocurrencies began with bitcoin. It started operations in 2009. Until then, attempts to create digital money on the internet had been challenged by engineers many times. However, it was not successful enough to spread. 

Cryptocurrency Classification

Although a cryptocurrency that started with bitcoin, it is currently being developed, and various types of cryptocurrencies exist in the world. The first thing to know is the following two classifications. 

1 Cryptocurrency without a specific operator

2Cryptocurrency with operators such as companies 

Open-source project

Bitcoin does not have any specific operating companies or organizations. By not having a particular operator, anyone can hold it and circulate it as money that anyone can use. Cryptocurrencies that do not have a Specific operator, such as bitcoin, have a program code (a computer program describing how bitcoin works). So, anyone can have access to see how it works.  

What is bitcoin? 

Now that you have an overview of cryptocurrencies, what is bitcoin next? As mentioned earlier, bitcoin went into operation in 2009 and began the history of cryptocurrencies. It was made from a paper written by Satoshi Nakamoto (several people or his identity is still unknown). In other words, bitcoin can be the “oldest cryptocurrency.”

What is Blockchain?

To reduce investment risk, let’s have some knowledge about the mechanism. Since bitcoin does not have a specific operator, we continue to process it generally by publishing the blockchain and checking for fraud by the miners. Miners get paid by bitcoin, so if bitcoin does not move properly, the value of bitcoin will decrease, and it is a mechanism that says that it will indeed rewrite fraud.

What is a cryptocurrency wallet? 

A cryptocurrency wallet is like a wallet for putting the virtual currency on a pc, smartphone, or another device. Many wallets are used for installing software on PC, smartphones, and electronic devices. They are usually used in several types according to the purpose. Bitcoin is money that can be exchanged on smartphones and pcs. However, to use the wallet safely, prior knowledge is required. Keep your cryptocurrencies safe with a solid understanding.

What is a wallet?

You can use cryptocurrencies conveniently and safely in the following way by using different wallets.

Wallets can be roughly categorized as follows:

Payment apps for sending and receiving payments are called “mobile wallets” and “desktop wallets.”

 Instead of safes for long-term storage called “hardware wallets.”

Wallets used as an alternative to vaults for long-term storage buy a dedicated terminal and store cryptocurrencies in it. In this way, by using different wallets, you can use cryptocurrencies conveniently and safely.

Knowledge of using wallets

When using wallets, there is basic knowledge that you should understand the difference between a hot wallet and a cold wallet.

A hot wallet is a payment app for sending and receiving money. It is a wallet that is always connected to the internet.

A cold wallet is a wallet that stores virtual currency in an environment where there is no internet connection.

It is said that cold wallets can be stored more securely than hot wallets, and it is better to use cold wallets when storing large amounts of money. 

Importance of passwords and recovery phrases

Passwords and recovery phrases are keywords that you need when using your wallet. Passwords are often required inside your purse, and restore phrases are needed when restoring your wallet. For example, a password would be the “key” of your wallet, and a restore phrase might be like a “resurrection spell.”Both are keywords that should be carefully managed so that they do not lose or leak out.

In Summary

Bitcoin was the first digital coin to succeed in such a way and spread worldwide as a “virtual currency. 

However, to make a profit in crypto or bitcoin, the trading strategy must be applied perfectly, and the platform must be chosen wisely. One such trading app is Bitcoin Era which is quite popular among novice players.

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