Big Guide to Cryptocurrencies
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In this guide to cryptocurrencies, we will explain everything from the background of cryptocurrencies, to how they work, what the difference is between them and how to get started with crypto
Explore and explain the Cryptocurrency universe
1. Bitcoin the first cryptocurrency
Bitcoin is the original cryptocurrency and also the birth of a new type of technology called the Blockchain. And almost all cryptocurrencies out there today are built on this so-called Blockchain technology. And yes there are lots of more cryptocurrencies available to buy on exchanges than just Bitcoin.
Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and released as open-source software in 2009. Bitcoins are created as a reward for a process known as mining.
- Learn more about how crypto mining works
- And read our guide on how mining Bitcoin Cash works
2. What are cryptocurrencies?
Cryptocurrencies, or cryptos. Are digital assets made on the technology known as the blockchain. A cryptocurrency can be used as a means of payment, much like Bitcoin or the USD (a fiat currency). Or it can represent value similar to shares or utility value.
Let us say there is a blockchain for booking concert tickets or decentralised parking service. Where a cryptocurrency could be used to book and pay for both services.
3. So what is the blockchain?
To further answer why cryptocurrencies are great we have to talk more about why blockchains are great.
There is a challenge with digital currencies, where there is a risk for these digital assets to be copied endlessly and used over and over again. This is known as the double-spending problem. So to prevent digital assets to be spent more than once the blockchain was invented.
Where every transaction is made open and shared via a public ledger. So that everyone could see if a cryptocurrency had been sent and used. In the blockchain, every new block of transactions is made up of all past blocks and transactions.
Making the record there for everyone to see and immutable for change.
This simple but ingenious invention is known as the blockchain.
4. You can buy hundreds of cryptocurrencies at exchanges
There are 2086 cryptocurrencies listed on CoinMarketCap. But don’t worry there is no need for you to learn about all, even less so looking to buy all.
In a year or two probably 50% of those or more will be gone. But there are a lot of promising investments out there, with real use cases and needs. You just have to figure out which ones!
5. There are more than 230 crypto exchanges
But that’s about 100-200 more than you ever need, or want to use. So it’s important for you to explore and understand which exchanges you might want to use. And you can easily understand filter away the unwanted exchanges by this method:
- Does X exchange currently have Y cryptocurrency available (the cryptocurrency that you want to buy/sell)
- Is X exchange open for me? Some exchanges have restrictions for which countries they can be open to
- How much trade volume does X exchange have? With little or no trading volume for Y cryptocurrency the harder, it will be to buy/sell said crypto (at all / at the price you want for it)
- You can find the best price for most of the popular cryptocurrencies using Go CryptoMarket here.
We have also used plenty of cryptocurrency exchanges out there, and frankly, the need for them all to exist is pretty slim. And some are not run with enough focus and security and ease of use, that’s why we at Go Cryptowise only lists the best ones here.
6. DYOR – Dy Your Own Research
A common expression used in the crypto community, and it’s important for new users as well as senior crypto lovers. It means that you should do research into the tokens/coins that you might want to buy, and decide for yourself if they are worth investing in.
Following this advice will mean that you will, educate yourself, be in control of your decisions, and less likely to be tricked/scammed. As there are people out there who might have some bad agendas for pushing their coins to you.
7. How and where do I buy Bitcoin?
If you want to buy some Bitcoins then you need to find an exchange where you can buy it from. There are some exchanges where you can buy Bitcoin via bank transfer (wire transfer), credit or debit card.
Bitcoin is the world’s most famous cryptocurrency and pretty much the only one you can buy at any exchange. So you won’t be without options when looking to buy Bitcoin. But it’s important to research the different exchanges and use the safest ones.
You can buy Bitcoin here at pretty much every cryptocurrency exchange – use our comparison tool to find the right one for you – Exchange Comparison Guide
We have created a guide for you get started with investing in Bitcoin – read it here below and find more popular Bitcoin guides here.
8. Where can I spend my Bitcoins or Cryptocurrencies?
The mass adoption of Bitcoin and cryptocurrencies are not yet here. There are only a handful of shops, restaurants, brands and more that today accept Bitcoin or crypto.
So you might need to have a search on Google to find the ones, but we have also listed some of the most interesting places (restaurants, hotels, shops, etc) around the world that today accepts Bitcoin and other cryptocurrencies. Find the guide here below.
You can also use these websites to find more Bitcoin-accepting places:
- Coinmap – coinmap.org
- Use Bitcoins – usebitcoins.info
- Where to Spend Bitcoins UK – wheretospendbitcoins.co.uk
And here is a guide for where you can spend Ethereum at some of the most interesting places that we have found.
9. How do crypto taxes work?
So you might have heard or known from before that you might need to pay taxes on your cryptocurrency trades and incomes. And this is, of course, different in every other country, so always check with your national tax agency or local tax advisors.
But it is common for many countries that Bitcoin and cryptocurrencies are taxed as assets, and at such will be exposed to capital gains taxes. So if you bought 1 Bitcoin for $5000 USD and later on sold it for $6000 USD, then that extra $1000 USD is taxable.
You can find more information on our Bitcoin and cryptocurrency tax guide here, and below cryptocurrency tax tools that help to automate your tax reports, which are super handy.
Check out our handy crypto taxes section with tools, guides, and tips
10. HODL, REKT – the crypto lingo
Don’t worry, everyone started out as a beginner. So when you see crypto slang like hodl, rekt, DYOR then you might at first get a bit confused and worse scared away. But don’t worry, everyone started out as Bitcoin and cryptocurrency novices. And we have created the biggest cryptocurrency slang guide that will help you navigate this space and become a crypto expert in no time.
We also have a full cryptocurrency vocabulary here that you can bookmark and come back to us we will continue to update it with new crypto and Bitcoin slang.
You can find the complete crypto vocabulary here
11. What are smart contracts?
Smart contracts are a pre-defined set of rules that are written in/on the blockchain code, which allows for greater functionalities and use cases to be combined with the blockchain.
The smart contracts facilitate a completely automated universe or services and products to live on harmoniously. An example of this could be a car rental service where the customers pay for the exact mileage driven, time used, or how well they drove the car and followed the speed limits, etc.
These conditions could be coded onto the blockchain and depending on the exact usage the according to cost will be charged to you. And it will all be done automatically without a middleman verifying it all.
- Learn more about smart contract technology here
12. How to sell crypto for cash
We have also created a guide to help you understand what options you have available when you want to sell your Bitcoins or other cryptocurrencies for cash.
At some point, you will be looking to ‘cash out’ Bitcoin to cash, or so-called fiat money. These are your two best options according to us for cashing out:
Method 1 – Via www.Localbitcoins.com
Method 2 – Via fiat accepting exchanges (compare exchanges here)
Method 3 – sell your cryptocurrencies for a stablecoin
Read the full guide here
11. How much is one Bitcoin worth?
Well, the price of Bitcoin and other cryptocurrencies continuously fluctuate. Like with other assets and stocks. But crypto is known to be a bit more volatile than other types of investments.
Meaning that it will move at a price higher and lower much faster and stronger than stocks, bonds, and commodities. So to answer the question of how much one Bitcoin or other cryptocurrency is worth is impossible, without checking live prices. Which you can at our Bitcoin and cryptocurrency price tools.
Bitcoin price tools here
13. How can I pay with Bitcoins?
Yes, so you don’t have to take out cash out your cryptocurrencies for Fiat cash to pay for stuff. But you can get a crypto debit card to do the same thing. They work like any other VISA or Mastercard debit card that you top of with money/crypto. There are a couple of good options on the market.
Debit cards for cryptocurrencies can be found here
We hope that you found this guide helpful. Please share it if you did. If you have questions or comment please feel free to leave them here below and we will try and answer them as soon as possible. In the meantime good luck and be safe.
Other popular guides:
- 8 most popular privacy coins
- The top crypto exchanges in 2019
- A guide to cryptocurrency markets
- HODL, DYOR, REKT the 41 cryptocurrency terms you need to know!
Per Englund – Founder of Go CryptoWise a cryptocurrency and tech fan that want to see better and smarter products and services that make our lives better and easier