An Easy Guide To Crypto Currency for Beginners
If you have kept up to date with the current currency and financial trends, the terms cryptocurrency, Bitcoin, Ethereum and Ripple are probably not foreign even if you are not 100% sure what they mean. Bitcoin mining is just the tip of a much larger, often comfortably profitable, industry. For some people, the whole idea surrounding cryptocurrency is one that sounds a little too good to be true, but the very real returns that people are enjoying tell a different story.
The whole industry lies on one thing: Cryptocurrency mining hardware. Without the right mining rigs, you cannot be a part of the network generating the various currencies.
Some Bitcoin Background
As a cryptocurrency, Bitcoin is regarded as the original online currency which basically helped to launch and cement what is now a worldwide online stock market. This digital asset is possibly one of the most secure online currencies, with cryptography giving it incredible protection.
Bitcoin first became available to the public in 2009.
In the years following the introduction of Bitcoin, more cryptocurrencies were launched, some with different uses than others. Although the original creators of Bitcoin remain anonymous, using the name Satoshi Nakamoto, the goal behind this technology was to eventually create an electronic cash system that would be completely decentralized. Once the currency gained popularity in 2011, the anonymous creators shared the source code of the currency as well as the domains. They then disappeared.
Without a central point controlling transactions, the system works in a manner similar to peer to peer file sharing. It cuts out the middleman and reduces transaction-related costs. In your more traditional monetary transactions, a centralised system would prevent double spending and keep records of the balances. In a decentralised system, the server which manages the traditional transactions is removed and replaced by every peer on the network, each of whom needs to have a list of transactions in order to check validity.
Although today Bitcoin prices are phenomenally high, the first person to sell their Bitcoin threw down 10 000 Bitcoin for two pizzas.
From 2015 until now, Bitcoin has been somewhat unstoppable in terms of its growth in value. In 2016, Ethereum almost overtook Bitcoin, as attention shifted from away what was considered to be the most sought-after currency. But Bitcoin bounced back and remains the most valuable cryptocurrency in the world.
Once you have a better understanding of this currency, you will probably have more knowledge than most other people, banks and even some governments. At this moment, those benefitting the most from their crypto understanding, are those in business. Companies have really been caught up in this new style of exchange. Not only do they accept Bitcoin and other cryptocurrencies as a legitimate form of payment, but they themselves are investing in cryptocurrency mining by buying quality cryptocurrency mining rigs.
What Exactly Are Cryptocurrencies?
One of the biggest hurdles for this industry is explaining what the currency is, something that is difficult on a good day because virtual currency cannot be held.
According to the dictionary, cryptocurrency is “a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.” To simplify it further, think of the currency as a bunch of entries on a database, which cannot be changed or used until a certain number of requirements are met. When you think of it that way, you might come to the conclusion that this currency is just like any other currency. The only difference is that it is not centralised and it is virtual.
Cryptocurrency can be traded in and used as a physical currency, much like you would withdraw money from your bank account. When it all comes down to it, all currencies need to be verified, and cryptocurrency simply uses a different method.
So it’s not a scheme, a Ponzi, or a pyramid waiting to tumble. Virtual currency is the real deal. And you can be a part of it as well.
How can you get cryptocurrency? Where do you start?
Anyone can gain cryptocurrency, as long as they have the right equipment. This equipment is known as cryptocurrency mining hardware and they can be purchased from companies like ours. With the rise of the online currencies, mining has become more competitive and there have been cases where people have been sold faulty machinery.
It’s easy to be duped when you don’t know what to look out for, especially when you are just starting out. We always tell our clients that it is best to buy first-hand cryptocurrency mining hardware rather than second-hand machines. We’re not saying all second-hand machines are damaged. But if you are new to the industry and you don’t want to be scammed right off the bat, it’s best to start your journey with reliable cryptocurrency mining rigs.
As a miner (this is the term used to describe those who use Bitcoin, Ethereum and other mining hardware) you will join a network of other miners. Each miner receives a complete record of the transactions and the balance of their account. In many ways, you have access to near total transparency regarding where and how the money is moving.
The transaction takes the form of a file, and the process of sending and receiving is nothing special or overly complicated. To break it down into steps, this is how a basic transaction works:
- A person requests a transaction. The transaction can include cryptocurrency, records, contracts or other kinds of information.
- This request is then sent out to the peer to peer network which consists of computers (known in the industry as nodes).
- The network validates the transaction and the status of the person requesting the transaction. This validation is done using algorithms.
- After the verification goes through, it is combined with other transactions within the network in order to create a ledger. This can only be done when there is a block of data.
- This new block of data will be added permanently to the blockchain (which we’ll get to). The data cannot be altered.
- The transaction is then complete.
Luckily, this is a process that is going on behind the scenes. When using Bitcoin mining rigs, Ethereum mining rigs, or any other kind of cryptocurrency mining hardware, the machines will take care of the finer transaction details.
The transactions that you make will become known to the network, but as the transaction is permanent and cannot be changed in any way, you won’t have to worry about losing money during the process. The transaction needs to be confirmed in order to ensure the safety of the process. To send and receive currency, all users need to have a wallet.
The blockchain is the crux of transactions. It is an invention well ahead of its time. It is the digital ledger of all of the crypto transactions and it is programmed in a way that it cannot be corrupted. It records all valuable information which is what gives miners a fully detailed description of what is happening with current transactions.
Just like the internet, the blockchain is designed to store data and information which can be revisited later on. But unlike the internet, it is far more durable in that it cannot be controlled by a single entity and it has no weak points. Since the inception of Bitcoin, the blockchain has not once been significantly disrupted. And none of the disruptions has ever been the result of human error.
The Currency Wallet
The wallet is a software programme designed to store both public and private keys while it also interacts with the blockchain. It is this interaction which allows the users to send and receive currency during the transactions. The wallet is also the place where information and the balance regarding the information are stored.
Anyone who wants to mine and use cryptocurrency needs a wallet.
A wallet of this kind does not store the currency. In general, currencies are not stored anywhere. The only evidence of the currency exists on the blockchain. The keys which are stored in the wallet are used to check balances or to send money. Once the currency is sent, the ownership of the currency is sent to the wallet, thereby moving the money.
Now, the only way that you can gain access to money sent to your wallet is if your private key matches the public key. Think of it as a lock and key system; one opens the other when they match. Matching keys will result in the decrease in the balance of the sender’s wallet and an increase in the balance of the receiver.
No physical money changes hands, which makes transactions safer.
The Different Types of Wallets
Just as there are different currencies, there are also different wallets. You cannot get a wallet through the use of Bitcoin mining rigs, or any cryptocurrency rigs for that matter. The wallet needs to be downloaded.
The Desktop Wallet: Downloaded and installed on the desktop of a laptop or PC, only a single computer can have access to this type of wallet. This is the wallet to have when you want optimal security, but they can be vulnerable to hacking.
The Online Wallet: This wallet is run on the Cloud and can be accessed from any device. They are certainly more convenient, especially if you are on the move, but they are controlled by a third party and can be vulnerable to hacking.
The Mobile Wallet: This wallet is an app, and can be used regardless of where you are. The downside to this wallet is that the app has limited space.
The Hardware Wallet: All of the wallets above are software wallets. A hardware wallet is one that is stored on an external device, such as a USB stick. These wallets allow you to make transactions online, but the information is stored offline. This immediately increases its security.
The Paper Wallet: If might sound a bit unreal, but some people choose to print out the public and private keys and store them in a safe location. You will still need a software wallet, however, as this is the only way to gain access to the keys. The transfer of information can be done using a QR code, which can really save time and effort.
The Best Cryptocurrencies to Invest In
To keep up to date with the market trends as well as the flow of the various cryptocurrencies, The CoinMarketCap will provide you with up to date information about all of the biggest virtual currencies. What you choose to mine depends on you, and all of our cryptocurrency mining rigs are equipped to mine the various currencies. We’re going to cover the top 5 commonly mined currencies.
Bitcoin mining hardware is the term many people use when looking to buy a cryptocurrency mining rig, simply because Bitcoin is synonymous with cryptocurrency. It’s the original currency and it takes up the most of the market cap. Bitcoin is open source, which means that no-one owns it and everyone can be a part of the mining. This currency is ideal for individuals, businesses and developers. Some information you need to know about Bitcoin is that it is not an anonymous currency, you will need a virtual wallet, the prices can be volatile and payments cannot be reversed.
At one point, Ethereum was expected to become as big, if not bigger, than Bitcoin. Ethereum mining rigs allow miners to gain the currency and successfully carry out transactions. Unlike Bitcoin which pushes through all kinds of transactions, Ethereum is smart contract focused. Third parties cannot interfere with transactions, downtime is not possible and censorship is impossible. It works with a custom-built blockchain and enables developers to create their own markets, to move funds, and to store debt registers. You will need an Ethereum wallet for this currency.
The third biggest currency in the crypto world, Ripple is literally making waves in the banking industry. Ripple connects to banks and other payment providers to create a seamless experience. Users of Ripple can send money anywhere in the world with ease. Ripple also uses an advanced, secure blockchain of its own.
Another member of the Bitcoin family, Bitcoin Cash allows for speedy transactions, a reliable network, minimal fees, user-friendly set up, a stable payment system, and it is really secure. Anyone is welcome to join the Bitcoin Cash network. Bitcoin Cash gives miners access to unlimited financial growth.
Unlike the top 4 currencies, which are often used in conversation amongst miners, Cardano is not exactly the best-known currency. But it is gaining plenty of attention lately, as it becomes a real contender. Cardano uses a decentralised blockchain and it is an open source currency. This is a smart contract currency and at this point in its development, research is driving it forward.
The other 5 currencies that make up the top 10 are LiteCoin, NEO, Stellar, EOS and IOTA. If you have ever played the stock markets, or done some research into how a traditional market works, you’ve probably come across the advice to diversify.
The same advice could be given for cryptocurrency. You don’t have to use your cryptocurrency mining hardware to mine only one kind of currency. Watch the trends and stay up to date with the latest news to find out where else you can profitably focus your mining attention.
The Trusted Bitcoin Mining Hardware Suppliers in South Africa
More South Africans are discovering crypto mining, and the demand for Bitcoin mining hardware, Ethereum mining rigs and all other relevant hardware has soared. Finding a reputable Bitcoin mining hardware supplier in South Africa, the kind that is not just selling you a rig, but also giving you support is becoming difficult. Do your research into the company before you put down money on a rig. Ask questions, and read as many reviews as possible before buying. The right comparisons can make your decisions more affordable in both the short and long term.
Netsev is breaking the stigmas and giving superb service to all miners, from the newbies to the pros, while providing 24/7 support. Our cryptocurrency mining hardware is imported from the best suppliers and our products are backed by a warranty. We offer the option of shopping online, and we’ll happily deliver your rigs for free.