This guide will provide you with the basic knowledge needed to enter the cryptocurrency world, including concepts such as cryptocurrency, blockchain, wallets, and exchanges. It also covers key terms like stablecoins, altcoins, mining, holding (HODL), airdrops, and fiat. By understanding these basics, beginners can better comprehend the cryptocurrency space and make informed decisions.
Cryptocurrency knowledge enlightenment, a must-have for entering the cryptocurrency world!
1. For new investors, Bitcoin (BTC) and Ethereum (ETH) are considered the main digital assets in the blockchain world, and it is recommended that they prioritize these two assets.
2. There are many types of digital currencies, including currency types (like BTC), platform types (like ETH), application types (like SC), stablecoins (like USDT), and dividend types (like repurchased BNB). New investors should focus on distinguishing value coins from scam coins, with the former being suitable for long-term holding and the latter to be avoided.
3. The fiat currency channels for purchasing digital assets include over-the-counter trading platforms and private transactions. Over-the-counter trading platforms usually support various digital assets, while private transactions need to be considered carefully due to the lack of guarantees; once problems arise, it is difficult to recover funds.
4. Common digital currency trading platforms include Bitfinex, Bittrex, Binance, OKEx, and Huobi. They each have their own characteristics and can be chosen based on individual needs.
5. Common digital currency wallets include Imtoken (for Ethereum) and Bitpie (for Bitcoin). Be sure to keep your private keys and mnemonic phrases safe to prevent asset loss due to loss.
6. Aside from scam coins, important digital assets should be stored in secure wallets rather than on exchanges or other less secure platforms. This can significantly reduce the risk of theft or insider theft.
7. The cryptocurrency field is a major target for hackers due to its financial attributes, so be sure to enhance security measures when registering on exchanges, such as enabling Google two-factor authentication. Additionally, use different account passwords for different sites to prevent all accounts from being stolen in case of a data breach.
8. The typical process of cryptocurrency trading is: converting fiat currency to Bitcoin or Ethereum, then using it to purchase tokens of blockchain projects, and finally converting the tokens back to fiat currency.
9. An ICO (Initial Coin Offering) allows smaller companies to raise funds publicly in their early stages by issuing virtual currencies, similar to an IPO (Initial Public Offering) in the stock market.
10. Participating in an ICO requires paying attention to timing and amount restrictions. The earlier you invest, the higher the typical return, but not all projects are easily accessible. For example, airdrop projects are usually worthless coins and should be treated with caution, while projects like RSK require a certain financial capability to participate.
11. Private investments often promise high returns. However, practice shows that unofficial private placements or unverified investment institutions often carry fraud risks. Therefore, do not trust代投 blindly; once problems arise and funds are lost, recovery is very difficult. It is recommended to choose officially verified institutions to participate in private placements.
12. Investing in cryptocurrencies carries significant risks, and ordinary people are often easily swayed by the prospect of high returns. Always remember that investing carries risks and choose investment options that suit your risk tolerance.
13. Investing in cryptocurrencies is different from investing in stocks; price fluctuations can be extremely volatile in the short term, with changes of up to 50% in a single day. Therefore, do not approach cryptocurrency investments with a stock investor's mindset and be mentally prepared.
14. There is no such thing as technical analysis in the cryptocurrency world; short-term fluctuations cannot be predicted. The only low-risk arbitrage methods are hedging and bit lending, which are verified methods.
15. The most reliable investment method is value investing, and the ideal investment operation is regular fixed-amount investments. The investment ratio can be adjusted according to personal circumstances, but attention should be paid to risk control to avoid concentrating too much capital in high-risk assets.
16. Do not let investments affect your normal life and income sources. Investing is just one possibility, and the real ability to make money lies in off-market income, which should always be remembered.
17. The amount of funds invested should not exceed 30% of total assets, and high-risk operations such as loans, cash-outs, leverage, and futures should be avoided. Do not indulge in luck, pursue get-rich-quick schemes, or participate in speculative games that you cannot afford.
18. If you find yourself frequently monitoring market prices and unable to sleep, you may have fallen into the gambling trap. Investment should be a rational act rather than gambling, so take care to control your emotions.
19. Do not invest too much capital before gaining enough experience. You can invest small amounts to gain experience in the market and strictly follow your investment plan to gradually improve your investment level.
20. Investment returns are proportional to the amount invested, but risks must also be considered. I hope every investor can seize opportunities and achieve ideal investment returns.
Basic knowledge of the cryptocurrency world: a must-have for beginners.
1. What is cryptocurrency?
Cryptocurrency is a decentralized digital asset protected by cryptography. They are not controlled by governments or central institutions.
2. What is blockchain?
Blockchain is a distributed ledger technology that records cryptocurrency transactions. It consists of interconnected blocks, each containing a batch of transaction records.
3. What is a wallet?
A wallet is a software or hardware device used to store, send, and receive cryptocurrencies.
4. What is an exchange?
An exchange is a platform for buying and selling cryptocurrencies. They provide users with opportunities to buy and sell different cryptocurrencies.
5. What is a stablecoin?
A stablecoin is a cryptocurrency that is pegged to a fiat currency (like the US dollar) and aims to maintain a stable value.
6. What is an altcoin?
Altcoins refer to all other cryptocurrencies aside from Bitcoin.
7. What is mining?
Mining is the process of verifying and adding new blocks to the blockchain by solving complex mathematical problems. Miners use specialized computers or mining equipment for mining.
8. What does holding (HODL) mean?
Holding (HODL) is a term that means to hold cryptocurrency assets for a long time without selling.
9. What is an airdrop?
An airdrop is an event where projects distribute cryptocurrencies or tokens for free to users to promote project development.
10. What does fiat mean?
Fiat currency refers to government-issued money that is not backed by intrinsic value, such as US dollars or euros.
11. The risks of cryptocurrency trading
Volatility: The cryptocurrency market is prone to fluctuations, and prices can vary significantly.
Security: Cryptocurrency wallets and exchanges are susceptible to attacks.
Regulation: Cryptocurrency regulations are constantly changing, which may affect their value and availability.
