The media are flooded with topics that explain how decentralized currencies are the “money of the future.” The news announces a new shockingly high value for 1 Bitcoin every second week. There are stories how some Joe Shmoe became a millionaire because he bought a couple of Bitcoins a few years ago. And, advertisements for crypto-mining farmers pop up everywhere, convincing you to invest and become their new business partner. But, wait! Isn’t this just too much for you? You may be interested in some aspect of the cryptocurrency game, especially if it can bring you some cash. And, who would not be, right? But, you have a feeling like all this crypto-stuff is hard-to-digest food for your brain. And, you don’t want to get into something until you learn it well. For a long time, I’ve been in that same place where you are. Right in front of that tempting shiny door called cryptocurrency that leads to a whole world of unknown opportunities and risks. And just like you, I knew that without the needed knowledge, it would be dangerous for me to enter there. I started digging the internet, trying to find an honest writing from an average guy who has joined the crypto-mining world. But, all I got were advanced-language-level guides with numbers and rates, barely-understandable for me. After many sleepless nights spent on reading and researching, I finally felt the confidence that I needed, and made my first step in the cryptocurrency world. However, I’ve never forgotten the confusion and hesitation that I felt before entering. This is an honest writing about my journey into the cryptocurrency world that I wish somebody else had done it before me. So, if you are just a tiny bit interested in Bitcoins or crypto-mining, do not miss this opportunity to take a look at the crypto-world through my eyes and learn from my mistakes.
What Will You Learn?
Before we jump into the stuff why you are here, let me tell you that this article is an introduction to a series of articles about my crypto-mining journey. In these articles, I will share with you all the knowledge and experience about crypto-currencies that I gathered from various sources. And, the most important thing, all the information shared here are easy-understandable even for the folks who don’t have any previous cryptocurrency or Bitcoin knowledge. So, if your grandmother has reading will, do not hesitate to share this with her. You might be grateful later. Here is what you will learn:
What Bitcoins and cryptocurrencies are.How Bitcoin mining and crypto mining works.How to start mining Bitcoins and other cryptocurrencies.What the best crypto-mining hardware is.What the best crypto-mining software is.How to maximize your crypto-mining earnings.
What is Bitcoin?
Bitcoin is a currency just like the American Dollar, British Pound, or European Euro. However, unlike all other traditional currencies, Bitcoin is a digital currency and is not created or controlled by any government. It uses decentralized technology for secure payments and does not require banks or people’s names. People can send Bitcoins directly from one to another and these transactions are peer-to-peer transactions. There are no middlemen, and no banks involved cutting a percentage for the transfer. Bitcoin transactions are made from and to individual electronic Bitcoin wallets, and are digitally signed for security. Everyone on the network knows about a Bitcoin transaction. And, users can trace back the transaction history to the point where people invented the first Bitcoin.
What is Bitcoin Wallet?
Bitcoin Wallet is a software where a person can store Bitcoins. All Bitcoin wallets have a Bitcoin address and a private key. Bitcoin Addresses are public codes and people use them for sending and receiving funds from and to the Bitcoin wallet. They are just like a transaction accounts for your Bitcoins. Private keys digitally sign the transaction and allow the wallet to send funds. They prove the ownership of the coins held in the Bitcoin wallet. Private keys are just like the pin of your credit card. You can’t make a transaction if you don’t have it.
Types of Bitcoin Wallets
Because Bitcoin wallets are just a program that records transactions, they are available in a variety of forms. Desktop wallets are free downloadable computer software that allows users to create an address for sending and receiving bitcoins. These desktop wallets provide a place for storing the private key for making the transactions. Mobile wallets are mobile apps that overcome the immobility of desktop wallets. Once you set up your mobile wallet, you can use it for sending and receiving Bitcoins like any desktop wallet. The difference is that it is available on your mobile device. You can even use the touch-to-pay functionality via NFC or QR Code in physical stores. Web wallets are specialized websites for storing bitcoins. They allow users to access their Bitcoins from anywhere through the internet. However, there is a potential danger when storing your private keys online. Hardware wallets are devices specially made to store user’s private keys electronically. They come in the form of USB sticks or external hard drives. Bitcoin Paper wallets are services that provide users with a Bitcoin address and two QR codes. One which links to the address of the wallet, and another that contains the private key. These wallets eliminate the chances of cyber attack by keeping the information on paper.
What are Cryptocurrencies?
Cryptocurrencies are digital or virtual currencies which use cryptography for security. A defining feature of the cryptocurrency is that no government or person control it. Theoretically, cryptocurrencies should be immune to government interferences or manipulations. If you remember, Bitcoin has the same characteristics, which means Bitcoin is a cryptocurrency. However, besides the Bitcoin, there is a massive number of cryptocurrencies available. In general, they all use the same digital concept. But also, they differ in some characteristics. Here is a list of the most popular cryptocurrencies: Bitcoin, Ethereum, Zcash, Dash, Ripple, Monero, Litecoin, Bitcoin Cash, Bitcoin Gold, etc.
Wrap Up
This introductory article explains the most crucial things about cryptocurrencies. After you’ve read it, you know the basics of what are cryptocurrencies and how they work. Today investing in cryptocurrencies became a global phenomenon. While it is still somehow geeky at first sight, people who once understand it, knows its importance and potential. The most compelling part of this cryptocurrency world for many is crypto-mining or Bitcoin mining. When I found out for the first time, I was astonished by how this crypto-mining mechanism works. And, I immediately became interested in mining and producing cryptocurrencies. More information about how crypto-mining works and how can you earn money from it you can find in the next article.
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