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How to get started with Cryptocurrencies in 2018?

Just 8 years ago, the first Bitcoin real-world transaction took place: two large pizzas were bought by Laszlo Hanyecz, an American developer, who was spending 10,000 bitcoins to get the precious food. Valuable, these pizzas are still the same price while bitcoin has risen to over 20,000 USD … Cryptocurrencies are constantly growing. Today, there are dozens of these currencies based on cryptography. But what exactly are these cryptocurrencies and what does this concept cover?

This article will give you an overview of the best practices and tips to start in the best conditions with cryptocurrencies. 10 minutes read. Beginner level

What do we cover in this article :

What is cryptocurrency?
Why use cryptocurrencies?
Overview of the main cryptocurrencies
Crypto Addresses
Crypto-wallet
The concept of Mining
Exchange Platform bitcoins or other cryptocurrencies
What is a crypto Hodler?
What is the Blockchain technology?

What is a Cryptocurrency?

Cryptocurrencies are electronic currencies on a peer-to-peer or decentralized computer network based on the principles of cryptography to validate transactions and issue the currency itself. Cryptocurrencies like Bitcoin use a proof of work system to protect them from electronic counterfeiting (other cryptocurrencies may use other consensus algorithms). Many cryptocurrencies have been developed, but most are similar and derive from the first full implementation: Bitcoin.

Most cryptocurrencies are designed to gradually introduce new money units, while placing a limit on the total currency that will be in circulation in the future (with the exception of some specific currencies). This is done in order to mimic the rarity (and value) of precious metals and avoid hyperinflation.

Cryptocurrencies are managed by a large open account book that can be viewed by everyone (the blockchain) which lists all the transactions from the beginning. Each transaction is therefore traced and non-modifiable. On the other hand, the participants in a transaction remain anonymous as long as the link between the identity of a participant in this transaction and the numeric addresses used for the transaction could not be established.

Why use cryptocurrencies?

Cryptocurrencies are a revolution as was the internet at the time. The biggest advantage is gaining freedom from the banks, as well as the financial gain you can get from being an early adopter. You simply become your own bank!

If it is the pioneer, Bitcoin is no longer the only cryptocurrency available. There are even tens or hundreds of them including Litecoin, Ether, Ripple, ZCash, PascalCoin, Zephyr. For simplicity, we talk about Altcoins for all of these currencies. It is not possible to list them all here, but in order to make things clear, we offer you a list of the great specificities of cryptocurrencies. So they are ...

  • Digital: It is possible to transfer cryptocurrencies to anyone anywhere on the planet.
  • Defined: each alternative currency will ultimately have a limited amount of "coins". In the case of Bitcoin, it's 21 million not one more, not one less.
  • Secure: the principle of the "blockchain" makes it possible to authenticate all the transactions and so there can be no fraud. On the other hand, the theft of Altcoin remains perfectly possible.
  • Transparent: Most cryptocurrencies are open source and entirely public, whether it is the implemented algorithms, the protocols used or the software itself.
  • Pseudo-anonymous: Every transaction is public however the individual owner of those transactions and wallet addresses are not public on the blockchain.
  • Inalienable: fully decentralized, the Altcoins do not depend on a state or a central bank. Nobody can impose a freeze or seizure of accounts.

Overview of the main cryptocurrencies

As we have just said, there are hundreds, of Cryptocurrencies. However, although many in number, these alternative currencies should not be considered irrelevant as Bitcoin is now approaching 35% of the total cryptocurrency marketcap there are other tokens and cryptocurrencies growing in usage and demand.

The best way to classify and rank the most in-demand cryptocurrencies is to look at their total market capitalization... Thus Bitcoin is at the top of this list followed by Ethereum, Ripple and Litecoin. Some other currencies also manage to stand out from the crowd: we can cite the Monero, the Dash, the ZCash or even the Zephyr .. Do not blame us too much if we do not mention the case of your favorite currency, we as we have said, they are simply too numerous.

  • Litecoin: Litecoin is the first currency created after the Bitcoin. Its main goal is to reduce transaction confirmation times.
  • Ethereum: one of the most publicized, the Ethereum has been in the news for several months and has emerged as the second cryptocurrency after Bitcoin.
  • Ripple: Ripple's goal is to be a cryptocurrency for financial institutions and payment providers
  • Monero: Distinguished by its strong focus on privacy and alternative hashing algorithm, CryptoNote.
  • ZCash: ZCash is distinguished by respect for privacy. Thus, a ZCash transaction does not reveal either the parties involved or the amount.
  • Dash: in the manner of Litecoin, Dash focuses on the speed of transactions and in the manner of ZCash, it tends to preserve absolute anonymity.
  • Zephyr: A reward token for the Bitspark remittance network, Zephyr is built on the well established Bitshares protocol and uniquely traded on a decentralized exchange.

Crypto Addresses

An address is like your email address, it is where people can send money to and where you can prove you sent money from. The technology behind bitcoin and most other cryptocurrencies is made in such a way that you can have literally (that's the staggering number of 2 ^ 160) as many addresses as you want. When I say address, it's a bit the same principle as email addresses, except that here is a character string (starting with one and containing 34 characters for bitcoin) example: 17Qryjj4qnqZPgPXQsqaJYTJb7QeVBxA47 (this is one of so you can create an address for each of your acquaintances/friends/family / see even one address per transaction, for you to see. You know who gives you what, or to whom you send your bitcoins.
Be careful when you copy an address to read twice rather than one, especially if your transaction is it's a relatively high amount.

Crypto-wallet

A wallet is where you store your cryptocurrency, this can an online piece of software on your PC, a mobile app, or a hardware electronic device. One of the well-known hardware wallers is the Ledger Nano S for example. Others may prefer a light wallet like Electrum, or consider using "online" wallet-like blockchain.info. These last wallets are valid for Bitcoin, but one finds also the same for other currencies, some wallets support several currencies like Jaxx for example. In any case, once you have purchased or attained your cryptocurrency of choice, all you need, is to specify the destination address to which to send your purchases so that they are transferred to your wallet.

The Concept of Mining

Cryptocurrencies actually rely on an operation called "mining". It is a process based on intense mathematical calculations. The idea is to validate and secure transactions for a monetary return... Remember that a cryptocurrency is, in essence, virtual. It is therefore crucial to be able to authenticate all transactions.
The verification of these transactions is done in a kind of huge register deemed unfalsifiable called the "blockchain". All the interest of these cryptocurrencies are aligned to operate in a decentralized way.. One of the main mining companies is: Antminer.

Interested in finding out more about cryptocurrencies? Click here to learn about the 7 incredible benefit of cryptocurrencies in 2018.

Exchange Platform bitcoins or other cryptocurrencies

In order to transfer an amount in USD / Euro / HKD to these platforms, you will also need to provide some identification. Generally, it is an electronic copy of your identity card or your passport, as well as a recent bill (gas, electricity, internet) to prove your address. The bank-to-bank transfer from your traditional bank account to the platform of your choice will also be a painful step since it will, again, make the necessary steps with your financial institution so that the destination (Kraken, Bitstamp, Poloniex or other) be known to them.

Once this step is completed and your account is funded, serious things can begin since you can then buy and sell the cryptocurrency of your choice that is available on the platform. For the moment, beyond Bitcoin, we encourage you to look closely at cryptocurrencies like Monero, ZCash, Litecoin, Ethereum or Zephyr

For those who feel an adventurous soul, there are companies that take care of providing a return for bitcoins that are lent to them. Typically, these companies apply relatively aggressive trading algorithms in different markets and routinely collect around 0.5% to 1% per business day.

What is a crypto Hodler?

For those who simply want to hoard their digital currency, the option to leave it in account on trading platforms can be a concern. After all, Bitcoin is entirely designed to do without trusted third parties: the best option is always to hold your own cryptocurrencies yourself in your own wallet on your computer, hardware wallet or other secure wallets.

Important Reminder

Remember that cryptocurrencies are very volatile and for the moment it’s a speculative investment (as long as they will not democratize more) and you must invest only what you can afford to lose.

What is the Blockchain technology?

Banks, notaries, internet platforms, everyday we use the services of different trusted third parties. However, the latter still do not reach consensus in terms of reliability or legitimacy.
Is the blockchain is the opportunity to reform this system? Can we trust each other without resorting to a third party?
New technologies have allowed individuals to communicate and organize themselves directly without going through an intermediary but when an exchange involves a transfer of value we need a trusted third party. You have to go through a bank to send money or a notary to sell a property. However, the supervision of these trusted third parties is not without risk, which explains why we are gradually losing confidence in our institutions.
Today the blockchain offers an innovative alternative to the current scheme by promising to solve the intrinsic problems of the operation of trusted third parties.

But what is the blockchain? It is a computer system that can indelibly write a transaction between two parties. It is a transparent register that everyone can consult but without ever being able to modify the previous entries. This registry consists of blocks that contain hundreds of transactions. They add to each other forming a chain from where the term blockchain. Transactions can be very different in nature. It is possible to register an exchange of assets, a vote or a digital contract. To ensure all this process of individuals or companies called miners make available the computing power of their computers to perform the calculations necessary for the operation of a blockchain. This computing power makes it possible to check the validity of all the transactions recorded in a blockchain. These miners are paid in cryptocurrency in exchange for their computing power.

By ensuring the reliability of the entire network thousands of miners allow a blockchain to create trust between two parties without resorting to a third party like big data or artificial intelligence. It is still early to know to which point the applications of the blockchain will revolutionize our societies but one thing is certain, the blockchain represents an unprecedented opportunity to transform our system.

Want to know more about Cryptocurrencies? Click here to learn about the 7 incredible benefit of cryptocurrencies in 2018.

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