Understand how cryptocurrencies work on the Internet
Definition of a cryptocurrency
A cryptocurrency is neither more nor less, a virtual currency. Bitcoin is the very first cryptocurrency in history. When it was created in 2009, bitcoin was barely worth a few cents and its use was very marginal. Today, 1 bitcoin is worth between €25,000 and €30,000. It is possible to buy a Gucci bag directly in Bitcoin and even to invest in real estate. Its operation is based on the famous blockchain technology.
You don’t need to be a computer genius to understand the basics of blockchain. Imagine a huge single transaction register kept by several people who have nothing to do with each other. Each has a copy. Before registering a new transaction, the information is first exchanged and then verified by each of the people holding this account register, so that everyone has the same data. This universal ledger is the blockchain, and people actually represent many computers scattered around the world that communicate with each other. We are therefore talking about a decentralized network. This technology makes it possible to dispense with a traditional banking network managed by a single and unique decision-making body. The blockchain is public, accessible by everyone without a single external control.
Difference Between Bitcoin and Altcoin
The world of crypto is full of terms and abbreviations that you need to know if you don’t want to get lost.
Since bitcoin is historically the first cryptocurrency, it has kept its name. Over time, other blockchains have appeared, allowing the development of applications and the creation of other cryptocurrencies. These are Altcoins. Example of the best known altcoins: Ethereum, Ripple, Tezos, …
Buy Bitcoin BTC
As for currencies in euros, dollars, pounds sterling … each cryptocurrency has its abbreviation.
For Bitcoin, it is BTC. So when you want to convert euros or dollars into bitcoin, you will make a transaction
EUR -> BTC or USD->BTC.
You are probably wondering how to exchange euros in bitcoin? Almost the same way as converting your €20 note into sterling. Going through a currency exchange office, but virtual. You don’t have to buy a whole bitcoin. You can simply acquire a fraction of it.
Choose your secure online platform to buy your first Bitcoins
Exchange and broker, these online platforms to buy cryptocurrencies
These are the famous virtual exchange offices that will allow you to buy bitcoins. They are often called “exchange” or “broker” by the crypto community. Whatever name you give it, choosing your trading platform requires special attention. Here are some selection criteria for choosing the right exchange:
- PSAN certification (Digital Asset Service Provider) issued by the AMF (Financial Markets Authority). Guarantee of seriousness and security. The Coinhouse platform is the first to have obtained this label in France.
- Provision of a secure wallet.
- Transfer of cryptocurrencies to his personal wallet free of charge.
- Amount of commissions. Specific to each platform, it may vary. If you do not make large transactions too often, the impact of commissions will remain low.
- Availability of the cryptoassets of your choice. Not all brokers offer the same cryptocurrencies, but all will offer you at least Bitcoin.
Wallet and transactions on the blockchain
The wallet is simply the digital wallet, which allows you to store your virtual currency. It will allow transactions directly on the blockchain thanks to its address. A bit like the IP of your computer, each wallet has its identification number.
On the other hand, you can initiate transactions on the blockchain directly via your wallet only if you already have bitcoin. So either:
- you were sent bitcoin directly to your wallet;
- you mined bitcoin with your computer;
- you previously went through a broker to buy your first Bitcoins which you then transferred to your wallet.
Advice for buying bitcoins safely on the Internet
When you are a beginner in the world of cryptocurrency, it is better to go through the best known platforms like Coinhouse. They guarantee ease of use and safety. As you gain a better understanding of Web 3, you can consider manipulating your own crypto wallet and start evaluating the different exchange offerings available.