Beginners Guide to Cryptocurrencies

Cryptocurrencies have taken the world by storm; everyone is discussing their investments in Bitcoin, Litecoin, Ethereum and the growth potential of other coins.

Mining for coins has become a pastime for people from all walks of life, from scholars to accountants.  This article will give you a beginners guide to cryptocurrencies, providing a basic introduction into what Cryptocurrencies are, which ones people are investing in and how to get started.

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Introduction to cryptocurrencies

Cryptocurrencies are quite simply digital coins that are used in an online environment in place of traditional currencies to complete transactions.  Based on open source blockchain technology, the record of the transaction is available to everyone, known as a public ledger, and this makes fraud of cryptocoins very difficult.

All participants can see all transactions on the ledger, ensuring that a coin cannot be spent more than once. Cryptocoins also remove the need for a middleman to manage the transaction, such as a bank, which makes them more efficient.

In addition, because the transaction exists on computers all over the world, the system is redundant and secure.

To lean more about the basics of Cryptocurrencies and how they work, visit Udemy.com for some free courses.

Best cryptocurrencies

Since the launch of Bitcoin, hundreds and new cryptocurrencies have been launched, most of these know as Altcoin’s (alternative coins). Some of the currencies are fun currencies, like Dogecoin, and some have great potential and value.

Currently there are more then 1500 cryptocurrencies in circulation.

The list below looks at the top performing currencies of 2017.

  • Ripple, XRP (https://ripple.com) was the worlds best performing digital asset of 2017. With a market cap of more the $85 billion it is currently the fourth largest cryptocurrency.
  • Bitcoin,BTC (https://www.bitcoin.com) remains top of the list from a market capitalisation point of view, worth more than $128 million. Bitcoin is the most expensive cryptocurrency but investors can buy “ Satoshi” which are pieces of Bitcoin. Bitcoin has grown in value from $880 per Bitcoin to $3 775 since it’s launch.
  • Ether, ETH (https://www.ethereum.org) is high on the list if cryptocurrencies worth investigating for investment. Ethereum’s ability to build smart contacts on top of it’s technology gives the currency good potential for additional applications. In the year since its launch, Ethereum has grown in value from $10.03 to $225.
  • Litecoin, LTC (https://litecoin.org) was launched in 2011 as a competitor to Bitcoin and grew an incredible 8200% during the 2017-year. Litecoin’s market capitalisation is currently around the $17.8 million mark.
  • Dash (https://www.dash.org), formerly Xcoin and Darkcoin, has a market cap of $3 million dollars and has been in circulation for more than three years. During the three years the value per Dash Coin has increased from $ 12.23 to $ 340.03 at the end of 2017.

Investing in cryptocurrency

The increase in the value of cryptocurrencies in the last year has been incredible and many people who got into the market early have made a lot of money.

However before investing it is important to do research into your coin of choice and to understand the risks of investing. The market is incredibly volatile and any investor must know there is a risk of losing all your invested money.

The following sites, articles and video’s can assist you in getting started with cryptocurrency investments. Each of the cryptocurrency home-pages mentioned above, will also help you to get started investing in the specific coin.

https://blockgeeks.com/guides/how-to-invest-in-cryptocurrencies/

http://fortune.com/video/2017/11/21/heres-how-you-should-invest-in-cryptocurrencies/

Altcoin Wallet

If you’re interested in the exploding cryptocurrency scene at the moment and have taken the step to purchasing something other than bitcoin, you’ll be interested to know what your options are in terms of finding an altcoin wallet to keep your currency safe.

In this article we’ll explore just that.

Altcoin Wallet: Why you need one

When you invest and trade in cryptocurrencies it is vital that you have a digital wallet to store and keep your money safe. Quite simply, a digital wallet is a software program that stores your coins for you by holding the keys to the blockchains that enable you to trade.

By owning the keys, you have control over the funds linked to those keys. Should someone else access your keys, which are similar to banking PIN numbers, they can gain control over your funds.

Safeguarding these keys is the main function of a wallet. For guidance on how to download Altcoin wallets, please watch the following online video:

What is Altcoin?

Altcoin is quite simply a shortening of “Alternative Coin”. Post the launch of Bitcoin, a flood of new cryptocurrencies became available on the market and these are referred to as Altcoin’s. Some Altcoin wallets can manage one or two cryptocurrencies in addition to Bitcoin and some wallets can manage multiple currencies such as Ethereum, Litecoin, Dogecoin and Ripple.

Best Altcoin wallets

According to Steemit.com  the following are the best Alton wallets currently available:

  • Cryptonator: this is a multi-currency wallet that supports 19 different Cryptocurrencies and has more than 500 000 active accounts. More than 16 million transactions have been processed though Cryptonator. Registering and downloading a wallet is free but there is a rate charged on transactions which have been reviewed as being very high The keys are not kept by you on your device but by Cryptonator themselves which means they have ultimate control over your funds.
  • Agama or Komodo (https://supernet.org/en/downloads) supports 12 different currencies and is available for MAC and Windows. The keys are held by you on your computer and are not encrypted, which means you have to be careful.
  • Exodus: also supports multiple currencies and as an additional feature has Shapeshift built into the wallet, which enables easy exchange of currencies. The wallet also has charts and graphs that enable real time tracking of your portfolio. The wallet only supports 8 currencies, which the developers are not planning to increase. Suitable for MAC and Windows the keys are kept on your device and are encrypted.
  • Jaxx – is voted the second best Altcoin wallet available at the moment. It stores keys for 12 different currencies and has a friendly, easy to use interface. Jaxx is suitable for all platforms, MAC, Linux and Windows as well as mobile devices. Jaxx developers are constantly adding new coins and want to be known as the wallet that supports all coins. Keys are stored on your device and are encrypted.
  • Coinomi – The best Alton wallet based on the Steemit poll is Coinomi. This wallet stores keys for an incredible 64 cryptocurrencies and has Shapeshift built in. As an added feature it combines the value of your different currencies to give you an overall portfolio value. The keys are stored on your device and are encrypted and secure. The only downside to the wallet is that it is only available on Android and not IOS or Linux, although the developers are working on addressing this.

Regardless of the type of Cryptocurrency you are investing and trading in, ensuring you have a wallet that meets your requirements and keeps your currency keys safe is critical. When choosing your wallet ensure the security suits your environment and research the costs associated with the wallet.

Hardware Wallet

All the wallets mentioned above are online software wallets. Another option that you may want to consider for additional security is a hardware wallet, such as the Trezor or Ledger Nano S, which enables you to safely store keys offline.