An expert in crypto will read this and think “well that’s not quite right”. But I wanted to make this easy for a complete noob to get their head around.
In basic terms crypto is digital money that can be transferred using the internet.
They are border less and not controlled by any government. One of the great things with a lot of crypto’s is they are controlled by no one, but are created and managed by groups of developers/computer programmers. Decisions are made by consensus and often anyone owning the token/coin can vote.
They are usually built using blockchains in the form of a decentralised ledger, but more on these topics in my next post.
Most crypto aren’t actually currencies, but instead have some type of utility within a crypto ecosystem. You may need to own them to vote (governance), to pay transaction fees, to stake to earn a share in the fees to name a few.
When I first started, I found the easiest way to get my head around it was to think that you were essentially buying shares in a protocol. And I thought of protocols as a website or piece of software.
Most crypto’s fall into half a dozen catergories:
Currencies
Bitcoin Litecoin
Bitcoin Cash Dash
Terra/Luna
Privacy Coins
Monero
Zcash
Verge
Platforms:
I think of these as operating systems like Microsoft Windows or Mac OS that other software runs on using smart contracts.
Ethereum Polkadot
Cardano Cosmos
Solana Kusama
Zilliqa Tezos
Tron Eos
Exchange Tokens
Binance Coin Uniswap
Sushi Pancake
Crypto.com Huobi Token
FTX Token Kucoin Token
Stablecoins
Tether (USDT) USDC
Dai BUSD
DEFI (Decentralised Finance)
Aave Synthetix
Maker Dao Compound
Yearn Finance Ren
Utilities
Theta – Video streaming
Bit Torrent – Video streaming
Vechain – Supply chain solutions
Filecoin – Decentralised storage
Ravencoin – Asset transfer
Layer 2 Solutions
Polygon/Matic
OMG Network
Skale
This isn’t an extensive list by any means, but just some of the better known coins.
You could spend hours researching every different crypto. At last count there were around 10,000! If you are a short term trader you don’t really need an in-depth knowledge of the coins/tokens you are buying/selling, but if you are more of a long term investor and Hodler, you may want to do a bit of research into the coins you are interested. This can be fascinating as there are a bunch of amazing projects out there, all looking to change the world as we know it.
The website www.coingecko.com is a great place to start researching coins. It has all of the critical info including where you can buy and trade them (the Markets tab). This will be helpful as not all exchanges support all coins. Another piece of helpful info is the Market Cap, which is the total number of coins in circulation multiplied by it’s current market price. This will help you see which are the more established coins and which are new or obscure.
Hopefully this has been helpful and in future posts I will expand on most of the topics covered.
Next post: So what’s a blockchain?