cryptocurrency
Despite its ever-growing popularity, the cryptocurrency continues to puzzle and fascinate both experienced investors and novices alike. Just as fast as the cryptocurrency world is growing, so are new questions. In this article, we take a look at the top ten most Googled questions about cryptocurrency in 2023 and shed some light on this brave new world of cryptocurrency. So buckle up and join us on this insightful journey as we unravel these most burning questions step by step.
What is cryptocurrency?
A cryptocurrency, sometimes called crypto for short, is a digital currency based on cryptography. Most cryptocurrencies are decentralized, meaning there is no central authority for issuance or transaction verification. As a result, they offer a huge improvement in privacy and save on transaction costs.
Founded in 2009, Bitcoin is the first cryptocurrency and the largest in terms of market capitalization.
How does cryptocurrency work?
Cryptocurrencies run on distributed public ledgers – blockchains. A blockchain is essentially a decentralized database — a chain of blocks — containing all transaction records. Each block contains a series of transactions and is generated, verified and added to the blockchain by miners or validators.
Miners are block verifiers that mine new coins through the Proof-of-Work (PoW) mechanism, competing to solve complex math problems that are computationally intensive. As a reward, they receive new coins and transaction fees.
Validators are also blocked verifiers, but they don’t have to work hard. Instead, they must wager a significant amount of coins. Validators don’t have to compete either, as they are randomly selected for each block and the more crypto you wager, the higher your chance. New coins are also generated as a reward for these examiners.
Where to learn cryptocurrencies for beginners?
There is no shortage of intimidating jargon and technical details when it comes to crypto and blockchain in general. But the media and evangelists have been trying to lower the barrier to entry for the past decade. Some good starting points are:
Coinmarketcap or Coingecko is the two largest database for tokens, projects and everything related to the blockchain.
Investopedia, where investors learn all the concepts related to finance and investing.
Bitget Academy is a great starting point for beginners to equip themselves with everything they need to learn, trade and grow on the largest copy trading platform. We currently have over 700 articles in 20 different languages, covering everything from in-depth guides to practical tips and market updates.
Below are some flagship content series from Bitget Academy:
Bitget Bites – Our daily report on spot and futures market activity
Bitget Hot Takes – Our weekly in-depth report reveals what’s happening in the crypto industry.
BGB Sail – Our monthly report reflecting BGB performance each month alongside market overview
Semi-Annual Crypto Briefing, The Crypto Burrito and Bitget Annual Briefing 2022-23 – Our flagship series covers cryptocurrency developments semi-annually and annually to prepare you for the next phase of your crypto journey.
Where can I find the latest cryptocurrency news?
There are a number of media outlets/personalities covering crypto news and trends. To list a few:
CoinDesk, where you can find crypto news and guides.
Cointelegraph, just like CoinDesk but with a different name.
Or you can follow our Twitter account for the latest industry news and updates.
Types of Cryptocurrencies
Like everything else, cryptocurrencies can be divided into different types and groups according to various standards. The two most common categories are coins and tokens.
A crypto coin is a native currency of its own blockchain. For example, BTC and ETH are the two most popular cryptocurrencies. These coins can be transferred and used just like traditional currency, but their primary function is to pay for gas fees. These coins are generated by miners or validators during their mining or validation process and are not controlled by any central authority.
Crypto tokens are similar to coins but based on blockchains and are more functionally versatile. They can be:
stablecoins like USDT/USDC pegged to real assets;
utility tokens like ARB that grant access or power to their holders;
or even non-fungible tokens (NFTs), like BAYCs, that spread your notoriety across the social network.
Simply put, crypto coins are fuels that power their respective blockchains, while crypto tokens represent the endless possibilities of blockchains and smart contracts.
How to invest in cryptocurrency?
There are several ways to get into cryptocurrencies. The simplest of these is to buy directly from an exchange. Check out How Do I Find the Best Cryptocurrency Exchange? for more informations.
Alternatively, you can also invest in stocks or funds in the crypto industry. Key players in this space include GBTC, SQ and MSTR.
What is cryptocurrency trading?
Cryptocurrency trading is – you guessed it – cryptocurrency trading. Depending on your level of knowledge and the level of risk you are willing to take, you can either spot trade – i.e. buy crypto assets with immediate or “on the spot” delivery – or derivatives – i.e. speculate on the price of different crypto assets.
How do I find the best cryptocurrency exchange?
There are several criteria when looking for the best cryptocurrency exchange:
Security: Scammers are everywhere, but that doesn’t mean you should stop their every action. Several exchanges have already set up protection funds to protect their traders.
trading volume: Exchanges with large trading volumes are less prone to price manipulation and offer a more dynamic market.
user friendliness: How does it feel to navigate your website? What is it like if you don’t have much experience with crypto or trading?
As the world’s largest crypto copy trading platform and among the top five crypto derivatives exchanges in terms of trading volume, Bitget is the top choice for over 8 million users worldwide. With our $300 million protection fund, all of our users’ assets are in safe hands. Sign up now and enjoy our premium trading experience at Bitget!
Best cryptocurrency for investing
While it is irresponsible and near impossible to recommend the best cryptocurrency to invest in, there are several categories that are currently gaining momentum and could prove to be worthwhile investments.
Zero-Knowledge Rollups
Based on zero-knowledge proofs, zero-knowledge rollups (zk-rollups) are able to significantly increase the throughput of Ethereum mainnet with additional privacy. ZkSync, one of the major players in this space, deployed its network late last month and has already raised over $100 million in Total Value Locked (TVL). You can find more exciting zk rollup solutions in our zero knowledge zone.
Optimistic rollups
Similar to zk rollups, optimistic rollups are also layer 2 solutions that increase Ethereum’s transactions per second (TPS). Arbitrum, which got most of the attention last month, is now TVL’s biggest Layer 2. Check out our Optimism Zone, Arbitrum Zone, and ARBETF products for the latest projects from the Optimistic faction.
GameFi
Blockchain and gaming have always been closely linked over the past decade. There is no shortage of quality games in the crypto industry, and projects like Decentraland and Axie Infinity have already made their mark. Visit our GameFi Zone to discover more fun games and tokens in this section.
Of course, big players like BTC or ETH will always be a good investment and even a risk hedge. Cryptocurrencies can be quite volatile. However, please always do your own research and implement sound risk management before committing to it.
The future of cryptocurrency
The cryptocurrency, despite its constant ups and downs, has been growing rapidly and many businesses are beginning to accept it as a valid means of payment. Overall, cryptocurrency is an innovative technology with the potential to shape the future of finance as we know it.
