Cryptocurrency Basics

Last updated 22 days ago

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Benefits of using cryptocurrency

Cryptocurrency is borderless, relatively frictionless, peer-to-peer, and has extremely cheap transactions, offering the world a medium of exchange worthy of the networked 21st century. Compare this to high transaction fees often upwards of 10% fees currently taken by middlemen who do not share the value system of our network. These are banks, credit card processing companies, money transfer and remittance companies, international wire transfer services, and foreign exchange/conversion conversions.

Cryptocurrency is also thousands of times faster than 3-7 day time lags often associated with international payments. Remember the time before email, when we sent letters through the post? Cryptocurrency is “email for money”.

Cryptocurrencies are very different from government-issued currencies in that they are regulated by programmatic code, and not by bankers. Effectively, this means that no human can alter the money supply by printing more money. This protects individuals from inflation often associated with national currencies, notably in Venezuela and Zimbabwe today (two countries quickly adopting cryptocurrency as a way to store value).

How to buy cryptocurrency

You can purchase cryptocurrency with your national currency through regulated exchanges. For Americans, the most common exchange is Coinbase. For Europeans, Kraken is a good solution.

Americans: Register for Coinbase. Use our signup link to get $10 of free bitcoin! You can purchase common cryptocurrencies by connecting your bank account to your Coinbase account.

Global: Register for Kraken.

How to use your crypto wallet to send cryptocurrency

Every wallet has a public key and a private key. A public key is like your email address, which you give out to people so they can send you currency. In order to send someone else cryptocurrency, you need their public key. A Bitcoin wallet can send and receive Bitcoin, and an Ethereum wallet can send and receive Ether and “Ethereum tokens”. Bitcoin and Ether are two major cryptocurrencies, but there are thousands in circulation today. Always make sure that you send the correct currency to its corresponding wallet. Sending a small test first is a good way to do this.

A private key is like a PIN or a password. Never give this out to anyone, and don't lose it. Keep it in a safe place, like you would store cash. Don't save it directly onto your computer. If anyone gets ahold of it, they can take all your cryptocurrency.

You can also order a Bitcoin Debit card to spend your Bitcoin anywhere in the world that accepts Visa.

Further reading:

Beginner’s guide to cryptocurrencies

Bitcoin white paper (the document that started it all!)