Overwhelmed by the buzz in the cryptosphere? Start your crypto journey here with this beginner-friendly guide. From understanding what cryptocurrency is to exploring different ways to earn income with crypto, we’ve got you covered. Let’s dive in!
Table of Contents
- What is Cryptocurrency?
- What is Bitcoin?
- Web 2.0 vs Web 3.0
- What is Ethereum?
- What are Smart Contracts?
- Fungible vs Non-Fungible Tokens (NFTs)
- What is Play-to-Earn?
- What is Move-to-Earn?
- Other Ways to Earn Income with Crypto
- What Determines the Value of Crypto?
- Keeping Your Crypto Safe
- Get Started on Your Crypto Journey
What is Cryptocurrency?
Cryptocurrency, or digital currency, is a virtual asset designed to function as a medium of exchange. Secured by cryptography, it ensures transactions are secure and nearly immune to fraud. Most cryptocurrencies operate on decentralized networks powered by blockchain technology.
Popular examples include:
- Bitcoin (BTC): The first and most widely recognized cryptocurrency.
- Ethereum (ETH): Known for enabling smart contracts and decentralized applications.
- USDC: A stablecoin pegged to the US Dollar.
Cryptocurrencies eliminate the need for intermediaries, enabling peer-to-peer transactions globally.
What is Bitcoin?
Bitcoin (BTC) is the pioneer of cryptocurrency, introduced in 2009 by the pseudonymous creator Satoshi Nakamoto. Its underlying blockchain technology ensures decentralized, secure, and transparent transactions.
Bitcoin operates on a Proof-of-Work (PoW) consensus mechanism. Miners solve complex puzzles to validate transactions, earning Bitcoin as a reward. Bitcoin's limited supply of 21 million coins makes it highly sought after.
Web 2.0 vs Web 3.0
- Web 2.0: The current internet era, allowing users to read, write, and interact online via platforms like Google and Facebook. However, these platforms are centralized, with corporations controlling data and access.
- Web 3.0: A decentralized internet powered by blockchain, offering permissionless access, resistance to censorship, and user control over data.
For instance, decentralized finance (DeFi) applications let users access financial services like lending and trading without traditional banks.
What is Ethereum?
Ethereum is a blockchain platform enabling the creation of smart contracts—self-executing contracts with predefined rules. Unlike Bitcoin, Ethereum has evolved from PoW to Proof-of-Stake (PoS), reducing energy consumption significantly.
Fun Fact: Ethereum powers thousands of decentralized applications (DApps) and is the backbone of the NFT ecosystem.
What are Smart Contracts?
A smart contract is like a vending machine. It executes predefined actions when conditions are met. For example, if you insert the exact amount for a drink, the machine dispenses it without needing human intervention.
Smart contracts power projects like:
- Uniswap: Decentralized trading.
- AAVE: Crypto lending.
- 1inch: Aggregated DEX trading.
Fungible vs Non-Fungible Tokens (NFTs)
Fungible Tokens
Tokens like Bitcoin and Ethereum are fungible, meaning each unit is interchangeable with another of the same value.
Non-Fungible Tokens (NFTs)
NFTs are unique and non-interchangeable assets representing ownership of digital or physical items. Think of them as the Mona Lisa of the digital world—one-of-a-kind and highly valuable.
Popular NFT projects include:
- Bored Ape Yacht Club
- CryptoPunks
- Axie Infinity
The birth of NFTs has helped creators earn royalties without the need to go through an auction house like Sotheby's and Christie’s which charges a hefty fee to list or sell an art piece. Creators and artists can now leverage NFT Marketplaces like OpenSea, MagicEden, X2Y2, and LooksRare to launch a collection, and users can buy and sell their NFTs collections to other enthusiasts as well.
What is Play-to-Earn?
Play-to-earn games like Axie Infinity allow players to earn cryptocurrency by battling in-game characters. Rewards such as SLP and AXS can be traded or converted into cash.
What is Move-to-Earn?
Move-to-earn platforms reward users for physical activity like walking or jogging. Apps like StepN and Genopets use blockchain to gamify fitness, offering crypto rewards for healthy lifestyles.
Other Ways to Earn Income with Crypto
- Staking: Lock your crypto in a wallet to support a blockchain network and earn rewards.
- Yield Farming: Provide liquidity to decentralized exchanges to earn interest.
- Trading: Buy low and sell high on crypto exchanges.
- NFT Flipping: Purchase NFTs at lower prices and sell them for profit.
What Determines the Value of Crypto?
Key factors include:
- Scarcity: Limited supply, like Bitcoin’s 21 million cap.
- Utility: Tokens with multiple use cases, such as Ethereum.
- Market Sentiment: Demand driven by user interest and adoption.
Keeping Your Crypto Safe
Crypto wallets fall into three categories:
- Paper Wallets: Physical printouts of private keys.
- Software Wallets: Applications like Metamask.
- Hardware Wallets: Physical devices offering maximum security.
Pro Tip: Avoid storing large amounts of crypto on centralized exchanges to maintain full control.
Get Started on Your Crypto Journey
Coins.ph is the perfect platform for beginners. Regulated by the Bangko Sentral ng Pilipinas (BSP), it offers a secure and user-friendly gateway into the crypto world.
Sign Up Today!
- Download the Coins.ph app.
- Verify your account.
- Start trading or converting PHP into crypto.
Join the Coinmunity
Stay updated and connect with fellow crypto enthusiasts:
- Twitter: @coinsph
- Discord: Coins Community
- Telegram: Announcements | Community
- Facebook: Coins.ph
