Cryptocurrencies – shaping the world one block at a time
Cryptocurrencies are used to interact with various blockchains.
There are thousands of them out there, each with their own unique use case.
However, some are born with brighter futures than others.
This makes picking out a winner a tough task.
But fear not, we’ve got you covered.
We’re CryptoMeister and we’ve got everything you need to go from average Joe trader to being as legendary as Warren Buffet!
With more guides and reviews than you can shake a stick at, you know you’re in safe hands with us.
After reading our handy guides, taking a step to buy cryptocurrency will be easier than ordering an Uber or your next takeout dinner!
Let’s dive into the world of cryptocurrencies together!
Are you ready?
What are cryptocurrencies and how do they work?
There are thousands of different cryptocurrencies out there.
Each has its own use case, meaning that all cryptos are unique.
At the end of the day, however, all cryptocurrencies are used to interact with a blockchain.
It’s the blockchain that gives the cryptocurrency its different use.
For example, some cryptocurrencies give you access to payment rails.
Some give you access to supply chain management features.
And some give you access to decentralized finance (DeFi).
It all depends on which cryptocurrency you have.
If you’ve got Ethereum, you’ll use your ETH to pay for gas fees and items on the Ethereum blockchain.
This could be ERC-20 tokens, think of these as in-game currencies, or DeFi products.
If you’ve got VET from the VeChain blockchain, you’ll be able to track and trace items across various supply chains.
You’ll also be able to create your own supply chains.
Cryptocurrencies all have a use, but not all use cases are equal.
Those use cases that are used by real-world companies have the most value and the brightest future ahead of them.
So, while there are 500 or so blockchains focused on payments, only a handful are actually worth owning.
If you’re looking to buy cryptocurrency, focus on these as they’re the best cryptos with the brightest futures.
Many people say that cryptocurrencies are worthless because they’re not backed by anything.
But that couldn’t be further from the truth.
Cryptocurrencies are backed by something – their utility.
The more real-world use cases a cryptocurrency has, the more valuable it becomes.
So, if you’re looking to buy cryptocurrency, pick one that does something and is being used by real companies.
What can cryptocurrencies be used for?
Cryptocurrencies are coins and tokens used to interact with different blockchains.
Each blockchain is inherently unique, and they come in all shapes and forms.
Some are used for payments, while others are used for storing data.
As a result, there’s not a single blanket answer for this question.
Each cryptocurrency gives you the power to use the specific blockchain that it runs on.
This means for each use case, you’ve got a different currency.
This might seem a bit scary, but don’t panic.
It’s really simple, just like the regular world is.
A few use cases for cryptocurrencies include:
- Supply chain management
- Decentralized applications
- Digital identity
- Digital voting
- Record keeping
If you want to learn more about what cryptocurrencies can be used for, check out our complete guide to various cryptocurrencies and their use cases!
Are cryptocurrencies legal?
A big concern people have when buy cryptocurrency is if they’re legal or not.
Fortunately, for most of the world, it’s perfectly legal to buy cryptocurrencies, own them, trade them, and sell them.
There are a few exceptions to the rule and a few caveats.
But don’t panic.
We’ll run you through all of those.
As it stands, the ability to buy cryptocurrency is banned completely in the following countries:
Other countries have partial bans on when you want to buy cryptocurrency.
This could be that you’re not allowed to buy cryptocurrency directly from your bank account or you can’t use them for payments.
The following countries have a partial ban on cryptocurrencies:
- Saudi Arabie
For those of you that abide by Islamic finance principles, the world of cryptocurrency takes a whole different turn in the legal department.
Some cryptocurrencies have been certified as halal by top scholars, while some believe it’s haram.
And on top of this, cryptocurrencies are so different.
This means there’s no blanket answer.
If you’re unsure about whether a cryptocurrency is halal or not, it’s best to speak to your imam.
They will be able to guide you best and give you their opinion for every time that wish to buy cryptocurrency or use it.
Is cryptocurrency a good investment?
Cryptocurrencies have tremendously risen in value over the past few years.
And there’s no sign that it will slow down any time soon.
However, the eye watering volatility that makes crypto so exciting can also bite you.
There’s no guarantee that cryptocurrencies will continue to rise forever.
Big dips in value that are sustained can cause developers and miners to abandon projects.
This will result in a cryptocurrency dying.
Cryptocurrencies are a huge risk, but if managed correctly, they make a nice addition to your investment portfolio.
Bitcoin and Ethereum have returned incredible profits to long-term holders over the years, suggesting that long-term investments are the best option.
- Huge potential gains
- Great addition to investment portfolio
- Lots of cryptos to choose from
- Potentially tax-free profits
- Historical performance outstrips all other asset classes
- High volatility
- Markets are easily manipulated
- A lot of scams and rug pulls
There are a lot of risks when you buy cryptocurrency.
But if you manage the risks well by diversifying your portfolio, you can do very well investing in crypto.
Is it safe to buy cryptocurrency?
When you’re buy cryptocurrency, it’s generally a safe experience.
However, scammers and thieves can make it a potentially dangerous experience to buy cryptocurrency.
As long as it’s legal to buy cryptocurrencies in your country, then you won’t be in any trouble with the law.
The biggest issue that you can run into when you buy cryptocurrency is scammers.
There are many fake websites out there, pretending to be crypto exchanges.
They look like real and legitimate exchanges, but when you come to withdraw, you simply cannot.
All your money will be gone, and a few days later the exchange has vanished.
This is a common occurrence, unfortunately, and highlights just how important it is to do your research before you buy cryptocurrency.
Our best advice is that you stick to the best crypto exchanges and stockbrokers.
The other safety issue is thieves.
If you’re going to buy crypto through a peer-to-peer (P2P) meetup, then you could be at risk of serious harm.
For the most part, P2P transactions in the real world go off without a hitch.
But there have been cases where the deals go horribly wrong, and one person ends up dead.
A man in Oslo was murdered at a crypto trade gone wrong, and this is becoming a growing trend.
Many criminals cannot pass the KYC needed at most exchanges, so look for in-person meetups to buy cryptocurrency and sell it.
If you look like an easy target, these people can and will take advantage of that.
If you go to an in-person meet, let someone know where you’re going and take a friend with you.
Try and arrange the meet in a public place where there are plenty of people.
If the other person doesn’t agree to the terms, then it’s worth looking for a new person to buy cryptocurrency from.
Which is the best cryptocurrency?
When you’re looking to buy cryptocurrency, you want to buy the best one.
It’s common sense and only natural.
You want to buy cryptocurrency that’s going to live the longest and give you the best investment returns.
But, unfortunately nobody knows which will be the next moonshot that makes billions overnight.
Those are 1 in 1,000,000 and most people find those either by pure luck or are part of the project.
For everyone else, opting to buy cryptocurrency that has great fundamentals, solid goals and an ambitious team is the best way to go.
Now, not all cryptocurrencies are built the same, and they all have different use cases.
First and foremost, cryptocurrencies are designed to be used with the underlying blockchain network – not an investment.
But, as these blockchains gain popularity with companies using them, the value of the coin or token rises too.
This in turn makes it a pretty good investment to buy cryptocurrency.
See where we’re going?
These types of cryptocurrencies will only go up in value as the blockchain becomes more popular.
These are the stable investments that will stand the test of time.
Bitcoin is an exception to the rule.
It was the first and will always appreciate in value, just like a vintage car would.
You need to be aware of coins that are shilled all over social media by big personalities.
These cryptocurrencies are only buoyed up by these shillers and will eventually pop.
They likely don’t have any utility either.
Just quick cash grabs by the developers.
Just look at how Elon Musk pumps and dumps Dogecoin by shilling it in his Tweets.
Dogecoin doesn’t have any real use case, no matter what the Doge crowd wants to believe.
That means that in the long-run, it’ll run out of steam and fall down.
Find a sector that you’re interested in and do your homework.
If you like supply chain management, Ethereum, VeChain, WaltonChain and Ambrosus are all pretty big players and a wise pot if you want to buy cryptocurrency with potential.
If you’re after payments, Ripple, Stellar, and Dash are great choices.
What makes a cryptocurrency the best depends on what you’re looking for the best of.
Best places to buy crypto
Now you’re ready to buy cryptocurrency, it’s time to pick your platform of choice.
There are lots of factors to take into consideration when deciding the best place to buy crypto.
So, we’ve put in the hard work for you!
You can check out the best crypto exchanges and brokers at the top of this page.
Alternatively, you can deep dive into each cryptocurrency and see where it’s best to buy that particular one with our complete rundowns of each cryptocurrency.
The icing on the cake?
We’ve also reviewed all of the best exchanges and brokers, so you don’t waste any time!
These are the best places to buy crypto for 2021!
How can I pay for cryptocurrency?
When you buy cryptocurrency, you’ll need to pick a payment method.
Fortunately for you, there are quite a few options available.
Most of the ones we’re going to talk about here are universally accepted, but you might have a wider selection depending on which market you’re in and which payment processors are popular there.
All of that aside, anything with a trail is safest, especially if you don’t fully trust the exchange you’re going to buy cryptocurrency from.
If you want to go down the anonymous route, cash is obviously king when you buy crypto.
The safest and fastest way to buy cryptocurrency is with your card.
Simply pop in the digits in your card to the deposit page, and the exchange or stockbroker will do the rest.
Most of the time, you won’t have to pay any card deposit fees, with the site absorbing those costs – yay!
However, there are times where you will end up paying a small fee for card deposits.
This is an inherently safe option for when you buy cryptocurrency as if anything goes wrong, such as the exchange vanishing, you can ask the bank for a chargeback.
You also have a paper trace, so if the tax man has an issue with your crypto tax returns, then you can use the trace to get yourself out of a hole.
Unfortunately, some countries have banking bans, meaning you cannot use this payment method when you go to buy crypto.
There are ways around it, with payment processors hiding the true identity of the exchange.
This is common practice in the gambling industry and is slowly catching on to the cryptocurrency exchange world.
Card deposits are usually instant, getting credited to your account in a matter of seconds.
Bank transfers are similar to card deposits in terms of security, but that’s all they share in common.
A cryptocurrency exchange or stockbroker will give you a set of bank account details to make a bank transfer to.
Once you’ve made the transaction, it will usually take up to 3 working days for the transaction to be processed and credited to your account.
While they are slower than card deposits, they are always free to make for deposits.
They’re also safer and will make passing KYC at an exchange a bit easier, as more details are revealed about you through this transfer.
However, if you’re in a rush to buy cryptocurrency, avoid bank transfers as they can be very slow.
Especially if you have a weekend or public holiday in the coming days.
If you want to lay low and stay off the radar, cash is the undisputed king for when you want to buy crypto.
Nothing will ever be able to replace cash in terms of anonymity, so enjoy this currency while you can.
The only drawback is that you can’t head to a cryptocurrency exchange and give them your cash.
You’ll need to find someone in person to take your money and give you crypto, or use an ATM.
Crypto ATMs are on the rise and have pretty high limits before you’re asked for KYC.
If you break your deposits and withdrawals into groups of under $1,000, you’ll be able to stay off the tax man’s radar.
However, most crypto ATMs have limited operating hours due to their locations and come with high fees.
Crypto ATM fees range from 9% to 30%, but some are known to be significantly higher.
If your sole purpose for using a crypto ATM is to avoid paying taxes, you’ll likely end up paying more in fees anyway.
On the other hand, that’s a small price to pay for anonymity, which is harder and harder to achieve these days.
If you’re meeting up with other crypto enthusiasts, make sure you do it in a public place where there are lots of people.
There have been several cash for crypto deals gone wrong, with people even getting murdered.
If you opt for this type of transaction, make sure you take a friend and are as safe as possible.
Who can forget the day when PayPal went crypto?
It was an incredible moment for the crypto world.
Since then, more and more crypto exchanges and stockbrokers have been enabling PayPal as a payment gateway.
This means you can make deposits through PayPal, just as you would when checking out on just about any other website out there.
You can opt to buy crypto with PayPal, but rumors have it that it’s actually a CFD rather than the real thing.
The Skrill, NETELLER, Paysafe group of companies are very crypto friendly and have been for quite some time.
As a result, a lot of crypto exchanges will allow you to deposit using your Skrill, NETELLER or Paysafe account.
Similarly to PayPal, you just login with your account and process the deposit.
It’s quick and simple to do.
However, when verifying that you actually own the account you deposited from, you will have to provide screenshots of your balance and transaction history.
This is a bit of an invasion of privacy, especially if you use this payment method for other sensitive purchases or subscriptions.
Nonetheless, it’s still a solid way to buy crypto when you’re in a jam and the bank won’t let you use your card.
It’s a great workaround for banking bans.
How do I buy cryptocurrency?
If you want to buy cryptocurrency, you’ll need to make a few decisions.
Not all cryptocurrency is the same, and not all cryptocurrencies trade in the same way.
What we mean by that is some services sell a bit of paper that tracks the value of cryptocurrency.
We also mean that for an example: Bitcoin, Ethereum, Dogecoin and Ripple are all very different cryptocurrencies.
We’re going to run you through everything so that you’re full of confidence when you buy cryptocurrency for the first time.
Honestly, we’ll give you all the info to make you as confident as Vitalik Buterin or Satoshi Nakamoto.
The most popular way to buy cryptocurrency is through a crypto exchange.
There are thousands out there, which makes picking one to use a challenge.
Some will have more choice when it comes to trading pairs, some will not support a fiat currency that you want to use and some will not have a license to operate in your country.
Exchanges allow you to deposit a fiat currency using your bank or credit card, bank transfer or another type of payment processor.
You can then pick a cryptocurrency that you wish to buy and place the trade.
Within seconds you’ll have your hands on real cryptocurrency that you can use.
It’s recommended to move your crypto off the exchange as these are not traditionally safe places to store crypto long-term.
If you already have an account with a stockbroker, you will more than likely be able to get exposure to a few cryptocurrencies through them.
You’ll have to find the cryptocurrency products that the stockbroker has listed on its platform, and then you can execute a trade to gain or decrease exposure to cryptocurrency just as you would a stock, bond or fund.
For the most part, you’ll only be able to find Bitcoin or Ethereum at stockbrokers.
This is because financial institutions have only created these trackers that stockbrokers can list on their platform.
Unfortunately, this means that you can’t withdraw the cryptocurrency or spend it in the real world.
It’s simply a piece of paper that tracks the value of the selected cryptocurrency.
A stockbroker is the best way to go if you simply want exposure to cryptocurrency without the added risk and hassle of using a cryptocurrency exchange.
What’s the difference between a CFD and a real cryptocurrency?
Contract for differences (CFDs) and real cryptocurrencies are a very controversial topic.
Many stockbrokers and mobile apps that offer banking services will allow you to buy crypto.
But what they fail to say is that it’s actually a CFD.
This in turn leads many people to regret the purchase once they find out that they cannot withdraw the currency and move it to their own private wallet.
But, that doesn’t make CFDs a terrible thing.
A CFD is simply a token that tracks the price of a specific cryptocurrency.
It’s not the real deal.
It just gives you exposure to a particular cryptocurrency without the faff and hassle of signing up to a cryptocurrency exchange or worrying about getting hacked.
In fact, cryptocurrency CFDs were so badly advertised, the UK banned retail investors from using them.
On the other hand, you’ve got real cryptocurrencies.
These are the real McCoy and let you do all the cool things the cryptocurrency promises.
You can shift them between wallets, track your transactions on the blockchain and tell all your friends about how cool you are.
So, to summarize.
CFDs are financial instruments that give you exposure to the price volatility of a cryptocurrency.
They’re not actual cryptocurrency.
Real cryptocurrency, on the other hand, does exactly what it says on the tin.
They both have their purposes, with CFDs being the ideal way for beginners to buy cryptocurrency and get their first real taste.
We could go on for days about the fundamentals of both CFDs and real cryptocurrency, but we’d bore you to death.
Which Cryptocurrency has the best potential in 2023?
It is not easy to predict what cryptocurrency is next to explode in growth, in fact, it’s pretty much impossible.
Who doesn’t want to get rich quick and retire young – you’d be mad to not want to!
Many people turn to cryptocurrency in a bid to achieve this goal.
When you consider that Bitcoin was once worth less than $1, it’s easy to see how so many people got rich from crypto.
But, that’s the story of a few, not the many.
It’s getting harder and harder to make millions in crypto.
Decentralized finance (DeFi) projects offer the best hope, but even they’re not a guarantee.
SHIB rose thousands of percent after launching, creating overnight millionaires.
But these are 1 in 1,000,000 shots and don’t happen too often.
If you go chasing millions in crypto, you’ll end up losing more than you make.
Your best bet is to create a diversified portfolio of coins and hodl for the long-term.
It’s less fun, but it’s a much safer way to invest in crypto.
Not to mention you can save a pretty penny on your tax bills if you opt for this path too.
Can I day trade cryptocurrency?
Day trading in the forex and stock world is pretty common.
In fact, you can do it with a great degree of success, if you know what you’re doing.
However, if you’re just winging it, you can lose a lot of money very quickly.
You’re relying on short, sharp and sudden movements, and if you can’t get your orders in quick enough, you miss out.
The same goes for when you want to buy cryptocurrency.
It is possible to day trade, but it’s not something that everyone should do.
Only day trade cryptocurrency if you have a good deal of trading experience and you’ve done your research properly.
Most crypto day traders will trade on 1 hour or 30-minute charts, so these are a good place to start.
If you’re new to day trading, avoid using leverage.
So, while you can make money day trading cryptocurrency, there are a lot of factors that could ruin your trades.
It’s very risky and should only be done by pros or if you’ve done a lot of research into it.
Do I have to pay taxes on my cryptocurrency?
Benjamin Franklin famously wrote in a letter to Jean-Baptiste Le Roy in 1789 that included the following quote:
Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
Franklin’s vision still rings true to this day, unfortunately.
And the same applies to you when you buy cryptocurrency and make profits.
But, if you live in particular parts of the world, you can get discounts on your crypto tax bill – now that’s a win worth moving for.
Generally speaking, you pay the standard capital gains rates on your cryptocurrency profits.
But this also applies to your losses, meaning you can get tax deductions if you lose money when trading cryptos.
Australia, Germany and Malta will reduce your crypto tax bill if you buy cryptocurrency and hold it for a year or longer before selling.
This is done to incentivize long-term investing, rather than day trading, which can be very risky.
Countries where tax in general or capital gains tax doesn’t exist obviously won’t charge you any taxes on your cryptocurrency profits.
The following countries are crypto tax havens, meaning you won’t need to share your profits with the tax man:
- Hong Kong
To learn more about the taxes on cryptocurrencies, check out our guide to cryptocurrency taxation!
Are there any risks when you buy cryptocurrency?
As with everything, there are a lot of risks when you buy cryptocurrency.
Whether it’s not being secure enough and getting hacked or being forgetful and losing your keys.
There are so many ways you can lose everything in an instant.
And it’s a painful experience.
But, from these painful lessons we learn to be sensible, smart and safe when we buy cryptocurrency.
Hopefully you can learn from our painful experiences so that you don’t have to suffer.
But if you do make a mistake, rest assured that you’re not alone.
The most common risk associated with cryptocurrency is being hacked.
Getting hacked is, unfortunately, a common occurrence in this day and age.
Especially for those of us who are not that well versed in cybersecurity.
To protect yourself as best as possible from hackers, you should be using a unique password on every website you use.
You should also use a two-factor authentication (2FA) service on every account that supports it.
Avoid using your cell number as a 2FA device, as this too can be spoofed.
Finally, don’t share your login details to any sites with anyone – keep them secret.
Do all of these things, and you’ve got the basics covered.
This should keep you relatively safe from hackers.
At very least it will put hackers off targeting you as you’re more work to steal from.
There are many other ways you can get hacked and ways to protect yourself from these types of attacks.
But these types of attacks are reserved for people with massive crypto wallets.
So, you don’t need to worry about them… Unless you’re bragging about having 1,000 BTC online.
Scammers are everywhere, and they’re getting more sophisticated.
These types of people will set up fake websites that look legitimate in order to fool you.
The goal is to gather your login details to at least one website or application.
More than 50% of web users use the same credentials for all sites, making these scams highly effective.
Scammers will call you, email you and slide into your DMs.
To avoid falling for scams, there are a few steps you can take.
First up, treat everything everyone says as a lie until they prove it.
If it sounds too good to be true, it’s usually a scam.
Don’t fall prey to promises of quick and easy money that’s guaranteed.
It’s simply not true.
Triple check that the URL is exactly as it should be.
Scammers love to typo squat, which is the process of using a URL that has letters swapped out with a different case letter or symbol to look the same as the legitimate one.
Generally speaking, if you treat the internet with a healthy dose of skepticism, you’ll be fine.
On to losing your keys.
If you’re out on the town and you lose your house keys, you’re going to be sleeping on the porch.
The same goes for crypto.
If you lose your keys, you’ll be sleeping on the porch of your wallet for the rest of your life.
Write down your keys, which is better known as the seed phrase, in a safe and secure place.
But, whatever you do, don’t write them on the internet.
A BBC journalist learned the hard way after he stored his keys in Gmail.
Write it in a video game, write it on paper and put it in a safe, paint it on your wall in UV paint or get it tattooed on your thigh.
Just whatever you do, keep your keys somewhere safe.
Wallets cannot be cracked or broken into.
So if you lose those keys, you lose everything.
What are cryptocurrency wallets?
Once you’ve decided to buy cryptocurrency, you’re going to want to store it somewhere safe.
This means you’ll need to pick out a cryptocurrency wallet.
But just like wallets for your cash and credit cards, crypto wallets come in all shapes, sizes, and styles.
This makes picking the best crypto wallet tricky, especially if you’re new to the crypto world.
Simply put, crypto wallets are digital wallets that allow you to receive, store and send cryptocurrency.
Some wallets come with the ability to exchange and swap cryptocurrencies, but not all have this feature.
It’s safer to use a cryptocurrency wallet then it is to store your crypto on an exchange.
If you’re wondering why, it’s because exchanges can get hacked or vanish.
When this happens, the hot wallets get emptied and you can wave bye, bye to your cryptocurrency.
An exchange’s hot wallet will be where you crypto is stored on an exchange.
This means that getting your crypto off the exchange as fast as possible is always a great idea.
If you want to learn more about crypto wallets, check out our useful crypto wallets guide.
We explain everything about hardware, software and online wallets!
What is a cryptocurrency address?
A cryptocurrency address is a long alphanumeric string that belongs to you.
Crypto addresses are typically between 26 and 35 characters long.
This long string of characters is known as your wallet address, and it’s where people send crypto to.
Every blockchain has its own address format, so you will need a different address for different currencies.
For the time being, these are not human readable, but there are projects aiming to fix this.
Every wallet address is unique, meaning that nobody will ever get a wallet address that has already been generated before.
Some addresses will show as valid on multiple blockchains.
This is down to the technology being used and the fact that the wallets haven’t been updated since one project forked.
For example, Bitcoin and Bitcoin Cash use the same wallet coding system.
At the moment, very few wallets check the validity of wallets before proceeding with the transaction.
This means that if you send a cryptocurrency to a different blockchain wallet address, the cryptocurrency will be lost forever.
Unstoppable Domains is looking to create human readable cryptocurrency addresses.
In their thinking, you would own JoeBloggs.zil and this is the address you’d give people when they want to send you cryptocurrency.
You’d then link up your various cryptocurrency wallets to this blockchain domain.
When someone sends cryptocurrency to your domain, the domain will identify which crypto it is and then divert it to the corresponding wallet.
This is a huge step forwards for the cryptocurrency address system and will solve many usability issues.
However, for now, only a limited number of wallets support blockchain domains.
This means that if you enter a blockchain domain into an address field, it may show as incorrect.
Are cryptocurrencies bad for the planet?
One of the most popular anti-Bitcoin slurs is that they’re bad for the planet.
People point out that Bitcoin mining consumes enough electricity to power a mid-sized country.
They’re not wrong.
The Bitcoin mining process consumes a lot of power.
But so too does the traditional banking world.
In fact, the traditional banking world not only consumes more power, but it also consumes a lot of other resources, such as oil and paper.
The truth is that Bitcoin uses less power per year than Christmas lights do in 4 weeks in the USA and UK.
Many Bitcoin miners use renewable energy sources in a bid to keep costs down.
Renewable and green energy costs less, meaning miners using this type of energy make more money.
In fact, one Bitcoin miner in the United States bought and refurbished a hydroelectric dam.
But other cryptocurrencies use different consensus mechanisms.
Each mechanism has its own impact on the environment, with some being far more environmentally friendly than others.
Let’s check them out!
PoW – Proof of Work
Proof of Work (PoW) is crypto mining in its rawest form.
This is what Bitcoin, Dogecoin, Litecoin, DigiByte, and thousands of other cryptocurrencies use.
In this type of consensus mechanism, miners use computers to solve complex math puzzles.
This consumes vast amounts of energy and is seen as bad for the world.
PoW is the least eco-friendly consensus mechanism.
But many projects are looking to either move away from this or make it more efficient.
PoS – Proof of Stake
Proof of Stake (PoS) is considered more environmentally friendly than PoW, but it comes with its own set of issues.
PoS essentially rewards the wealthiest miners with more block rewards.
The more coins staked, the better chance a miner has of creating the next valid block.
So, in theory, the system can be gamed, and the network exploited by wealthy miners.
If you don’t mind that downside, it’s certainly better for the planet.
DPoS – Delegated Proof of Stake
Delegated Proof of Stake (DPoS) is a relatively new take on PoS.
It’s much faster and allows for networks to increase their transactions per second significantly over PoW and PoS.
Simply put, DPoS outsources validation of transactions to delegate groups.
These groups can be voted in and out by the network, so it encourages trustworthiness.
Validators still stake coins in the way you get in PoS, but they don’t do any work other than that.
If a validator is chosen to validate the next batch of transactions, they get to pick which delegate group gets the job.
However, it’s still not fully tested, meaning that you’re unlikely to run into a DPoS network any time soon.
Once they are live, they will be more popular than PoW and PoS blockchains owing to the environmental factors and speed.
PoC – Proof of Capacity
Proof of Capacity (PoC) blockchains use an authentication system to verify the total available hard drive space of a miner.
Instead of creating thousands of hashes, miners store a list of possible hashes on their drives.
The more space a miner has on their drives, the greater the chance of matching the required hash value and getting the mining reward.
It’s more than 30x more efficient than a PoW mining algorithm, which is a considerable power saving.
However, it does come with its own risks.
Malware could infect drives, potentially damaging the network.
It’s not very popular at the moment, but it does have potential to catch on.
Can I mine cryptocurrencies?
Cryptocurrencies rely upon miners and validators.
They keep the networks safe and running.
Without them, blocks wouldn’t be created, and transactions wouldn’t move.
But becoming a cryptocurrency miner can often be a little tricky.
For example, if you wish to become a Bitcoin miner, you’ll have to buy special mining equipment.
Long gone are the days where you can mine Bitcoin with your computer.
You need an ASIC mining rig, designed specifically to mine cryptocurrencies.
You’ll also have to join a pool, or invest in hundreds of thousands of mining rigs, which will cost you millions of Euros.
But there are still a few cryptocurrencies that are profitable for the average Joe to mine.
If you want to get into crypto mining, or just want to learn more about it, check out or guide to crypto mining!
For the most part, you’re better off sticking to your decision to buy cryptocurrency.
What is yield farming?
Yield farming is a hot new trend in the cryptocurrency world, and it’s easy to do.
It’s so lucrative, that some people are making thousands of Euros every day.
To explain it simply, you lock up your cryptocurrency in a pool and provide liquidity to a trading platform.
Think of it like lending your funds to a cryptocurrency exchange so that they can fill orders faster.
In return, you get paid interest on the finds you lock away.
Depending on the demand of the cryptocurrency you’ve locked up, you can earn even up to 3,000% APY.
That’s a crazy amount of interest.
But, you do open up yourself to the risk of impermanent loss.
That’s where the price of the currency you’ve locked away changes.
The bigger the change, the bigger the loss.
Stablecoins and less volatile cryptocurrencies are more immune to impermanent loss, but it can still happen.
This is the biggest risk with yield farming.
There’s far more to yield farming than this.
If you wish to become a yield farming expert, check out our guide to yield farming!
What is DeFi?
Decentralized finance (DeFi) is another hot buzzword in the crypto world.
No doubt you’ve heard it thrown around, and you’re curious.
Well, think of DeFi like your bank, only it’s nearly instant and the DeFi protocol doesn’t care about your life choices.
If you want to take out a loan, the DeFi protocol will check your wallet to ensure you’ve got the collateral for the loan you want.
If it returns yes, then you get the loan.
If not, you don’t get the loan.
It’s that simple.
There’s no politics, no background checks, and no long waiting periods like you get with the bank.
Just instant crypto loans.
The longer you keep the loan, the more interest you pay to the liquidity providers.
Those guys are the yield farmers from before!
Obviously, that’s DeFi in a nutshell.
If you want to dive in the deep end and learn everything about DeFi, check out our guide to DeFi!
Crypto is here and it’s changing the world!
The cryptocurrency world is evolving at a frightening pace.
Staying on top gets harder and harder with every passing week.
But we’re here and doing that for you, so you can sit back, relax and do the things you love.
Cryptocurrency might still be fairly new, but it’s an incredible technology that will change the rest of your life.
Follow the basics of internet security and you’ll be safe when using cryptocurrency.
It’s not as scary as the internet makes it out to be.
Follow our handy tips and guides and you’ll be a crypto pro in no time at all.
As always, if you’ve got any questions, drop us a message or comment below and we’ll help you out!