Cryptocurrency for beginners

Ole
28.09.2021
127 Views
Cryptocurrency beginner

Cryptocurrency is something you often hear about in the media, but many people are unsure of what cryptocurrency really is every day. Expressions such as “block chains”, “mining” and “gearing” can make the whole thing even more incomprehensible.

Here we have created a simple guide on cryptocurrency for beginners. We explain to you what cryptocurrency is in a simple and understandable way, and explain the difficult terms in a simple way.

First of all – what is cryptocurrency?

We all know money. The vast majority of us use traditional currency on a daily basis, ie national currency in the form of Norwegian kroner (NOK). The money is issued and administered by the Central Bank , and the banks act as intermediaries when we make money transfers.

Traditional money is very vulnerable to inflation, politics and interest rate changes. Because of this, someone wanted to create a currency that is completely independent of any central bank or banks at all. In 2009, cryptocurrency was launched for the first time, in the form of Bitcoin.

Cryptocurrency is simply explained as a digital currency with no connection to the authorities or banks. That is why cryptocurrency is also called a «decentralized currency». Control over the currency is not centralized at the central bank, but through a distributed database.

The distributed database is usually a blockchain, which can be considered as a public database where information is spread over a number of computers or “nodes”. Using advanced technology such as cryptography, transactions can be secured and verified.

Why buy cryptocurrency?

Many people choose to buy cryptocurrency because they want a fast and flexible means of payment that can be easily transferred across national borders. There are usually fewer fees involved in transferring cryptocurrency than in transferring traditional money.

Another reason why many people want to buy cryptocurrency is that they are largely anonymised. You pay through a digital crypto wallet that gives the user an address made of numbers and letters. Your name does not appear in the transactions.

If you want to be able to transfer money anonymously, quickly and cheaply, cryptocurrency can be a good choice. There are also many who buy cryptocurrency because they want to invest or speculate in the currency. Cryptocurrency can go up and down a lot in value due to unstable exchange rates, which can potentially mean that you can sell the currency more expensive than you bought it.

  • Quick and easy payments
  • More anonymous transactions
  • Investment

Is it wise to invest in cryptocurrency?

In our guide on cryptocurrency for beginners, we want to emphasize that investing in cryptocurrency can involve a great deal of risk. As mentioned, the exchange rate for cryptocurrency can fluctuate a lot, as cryptocurrency has relatively high volatility.

You can therefore risk losing a lot of money on this type of investment, and it is especially risky to leverage cryptocurrency. Giring means that you “borrow” cryptocurrency, and thus invest more than you actually had in equity.

For example, you can invest cryptocurrency equivalent to NOK 10,000, even if you only had currency equivalent to NOK 5,000. The more you shift, the greater the potential drop.

If you are going to invest in cryptocurrency, gearing should be carefully considered. Never invest more money than you can afford for a possible loss. Start small, and try your best. The process can be educational and fun when done responsibly.

How is new cryptocurrency generated?

There are various mechanics for recovering new cryptocurrencies. A certain number of digital currency units are often created in advance, and recovery of new currency units must take place at a predetermined pace.

The process of extracting new cryptocurrency is often called mining or digging, and is an activity you as a user can do from your own computer. You will then need a graphics card and any other equipment.

Mining is a complicated task that requires a lot of computing power. You are welcome to receive rewards for crypto recovery in the form of cryptocurrency.

Where to buy cryptocurrency?

As a newcomer to cryptocurrency, you may be unsure where to buy crypto. However, getting started is very easy. You only need to create a profile (user account) on a so-called crypto exchange. Here are some popular crypto exchanges you can look at:

  • Norwegian Block Exchange
  • MiraiEx / Firi
  • eToro

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Once you have created your user account, simply deposit a desired amount using one of the deposit methods offered. With most people, you can deposit money with common solutions such as Visa or bank transfer.

Then you can open the markets and find the cryptocurrency. You will then be able to see different types of cryptocurrencies, such as Ethereum (ETH), Bitcoin (BTC) and Ripple (XRP). Select the variant you want and confirm the purchase. The money is stored in a digital wallet.

Cryptocurrency for beginners with copy trading

In our guide on cryptocurrency for beginners, we also want to give tips on copy trading. This is a feature found on many cryptocurrency exchanges, such as eToro.

Copy trading makes it easier for beginners to get started with cryptocurrency investments. You can copy experienced users’ purchases and investments, so that the chance increases that you make smart and long-term choices.

Copytrading at Etoro

How easy it is to copy other traders at Etoro. This is how beginners can get started easily.

Cryptocurrency for beginners does not have to be difficult

In this guide you have been able to learn some basics about cryptocurrency. Simply explained, cryptocurrency is digital money that can act as both a means of payment and an investment. The currency is not controlled by the authorities or banks, but by the users themselves.

Cryptocurrency can be risky to invest in, but you can also profit from the investment if you make good choices. Feel free to copy others’ investments with copy trading, so that you can more easily get over the beginner’s knack.

Cryptocurrency is perhaps a bit advanced considering all the technology behind it, but is actually relatively easy to buy. You do not have to understand the complicated mechanisms behind the currency to be able to enjoy it.

FAQ

[sc_fs_multi_faq headline-0=”h2″ question-0=”Hva koster kryptovaluta?” answer-0=”Kryptovaluta kan koste både mye og lite, helt avhengig av hvilken kurs den aktuelle valutaen har. Husk at du ikke trenger å kjøpe en hel valutaenhet. Du kan f.eks. kjøpe 0,0001 BTC.” image-0=”” headline-1=”h2″ question-1=”Hvor selges kryptovaluta?” answer-1=”Kryptovaluta selges på kryptobørser, som for eksempel MiraiEx, eToro og Norwegian Block Exchange. Velg en plattform som er registrert hos Finanstilsynet.” image-1=”” headline-2=”h2″ question-2=”Hvilken kryptovaluta bør jeg kjøpe?” answer-2=”Det finnes mange kryptovalutaer man kan kjøpe. Bitcoin er den flest velger, men du kan også kjøpe Ethereum, DAI og lignende. Kjøp gjerne Bitcoin til å begynne med.” image-2=”” count=”3″ html=”true” css_class=””]

Author Ole

Ole jobber som freelance forfatter/skribent, men er også med på vårt team. Han har hatt en interesse for krypto i flere år og det er naturlig for han å opplyse andre om denne fantastiske teknologien. Ole sier selv at å skrive om kryptovaluta ikke er en jobb, men en lidenskap! For oss kan det jo ikke bli bedre!