NEW YORK – Despite Bitcoin launching way back in 2009, it’s only recently that you can’t turn on the news or browse the web without coming across some mention of cryptocurrency.
I got so many questions from my readers and national radio show listeners that I wrote an e-book about crypto to help. I demystify digital currency, mining and how to get started trading.
Sadly, I also hear from people who got fooled by one crypto scam or another. Where there is money, criminals are waiting.
Before we get started, know this is not financial advice. The crypto world is volatile, and you should never risk money you aren’t comfortable losing. Now, let’s take a look at some of the most common lingo:
Every cryptocurrency transaction is processed, verified and recorded on a virtual ledger known as a blockchain. When someone buys or sells using cryptocurrency, another entry is made.
Think of the blockchain as a series of boxcars from a train. When a cryptocurrency transaction is made, another boxcar gets added to the train.
The blockchain is decentralized. This means it’s not stored on one machine or even across one network. Instead, the blockchain exists on computers all over the world that are accessible because of the internet.
People and companies help verify each transaction that gets added to the blockchain using their own computer’s processing power on a decentralized peer-to-peer network. Each transaction is timestamped and individually encrypted, and cannot be reversed or changed. Yes, you read that right – crypto transactions cannot be reversed.
I know what you’re thinking: “I thought a Fiat was a car.” Not in crypto-land. Fiat money is government-issued currency. If you’re in the United States, that means the U.S. dollar.
Cryptocurrency, on the other hand, is virtual money. Cryptocurrencies aren’t backed by governments or any other standard used with traditional currency. Each “token” represents the amount you own.
How much each token is worth varies based on the current market value. One day it’s up; the next day down. With cryptocurrency, the price fluctuations can happen much faster and are more extreme. A good resource to check the current prices is CoinMarketCap.
Here’s an easy one to remember. An altcoin is any digital currency that’s not Bitcoin. There are thousands of cryptocurrencies.</…….