Despite its ever-growing popularity, cryptocurrency continues to mystify and intrigue veteran investors and beginners alike. New questions emerge just as fast as the crypto world grows. In this article, we will delve into the top 10 most Googled questions about cryptocurrency in 2023, shedding light on this brave new world of crypto. So, buckle up and join us on this enlightening journey as we decode these most burning questions, one search query at a time.
What is cryptocurrency?
A cryptocurrency, sometimes crypto for short, is a digital currency based on cryptography. Most cryptocurrencies are decentralized, that is, without any central authority for issuance or transaction verification. Thus, they offer a huge improvement in privacy and save on transaction costs.
Founded in 2009, Bitcoin is the first cryptocurrency and the largest by market cap.
How does cryptocurrency work?
Cryptocurrencies run on distributed public ledgers – blockchains. A blockchain is essentially a decentralized database – a chain of blocks – with all transaction records. Each block contains a number of transactions and is generated, verified, and added to the blockchain by miners or validators.
Miners are block verifiers that mine new coins into existence through the proof of work (PoW) mechanism – competing in solving complex mathematical problems that are computationally demanding. They receive new coins and transaction fees as their rewards.
Validators are also blocked verifiers but are not required to work hard. Instead, they have to stake a significant amount of coins. Validators also do not have to compete in anything as they are randomly chosen for each block and the more crypto you stake, the higher your chance. New coins are also generated as part of the rewards to these validators.
Where to learn cryptocurrency for beginners?
Crypto and blockchain in general are in no short supply of intimidating jargon and technical details. But media and evangelists have always been trying to lower the barrier of entrance over the past decade. Several good places to start include:
Coinmarketcap or Coingecko, is the two largest databases of tokens, projects, and everything blockchain.
Investopedia, where investors learn all concepts related to finance and investing.
Bitget Academy, is a great starting point for beginners to arm themselves with everything they need for learning, trading, and growing on the largest copy trading platform. Currently, we have over 700 articles in 20 different languages covering everything from in-depth guides, practical tips to market updates.
Below are some flagship content series from Bitget Academy:
Bitget Bites – Our daily report on activities of the Spot Market and Futures Market
Bitget Hot Takes – Our weekly in-depth report reveals what’s up in the crypto industry.
BGB Sail – Our monthly report which reflects on BGB performance each month alongside the market summary
Semiannual Crypto Briefing, The Crypto Burrito, and Bitget Annual Briefing 2022-23 – Our flagship series looks at cryptocurrency developments on a semi-annual and annual basis to prepare you for the next phase of your crypto journey.
Where to find updated cryptocurrency news?
There is a platoon of media/personalities covering crypto news and trends. To list a few:
CoinDesk, where you’ll find news and guides about everything crypto.
Cointelegraph, just like CoinDesk but with a different name.
Or, you can follow our Twitter account for the latest news and updates in the industry.
Types of cryptocurrency
Like everything else, cryptocurrencies can be divided into different types and groups by a wide array of standards. The two most prevalent categories are coins and tokens.
A crypto coin is a native currency to its own blockchain. For instance, BTC and ETH are the two most popular cryptocurrencies. These coins can be transferred and used like traditional currencies, but the most important function they have is paying 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 are built on top of blockchains and are functionally more versatile. They can be:
Stablecoins, like USDT/USDC, that are pegged to real-world assets;
Utility tokens, like ARB, that provide access or power to their holders;
or even non-fungible tokens (NFTs), like BAYCs, that spreads your prominence over the entire 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 gain exposure to cryptocurrencies, the easiest of which is buying them directly from an exchange. Check out ‘How to find the best cryptocurrency exchange?’ for more information.
Or, you can choose to invest in stocks or funds in the crypto industry. Several major players in this field include GBTC, SQ, and MSTR.
What is cryptocurrency trading?
Cryptocurrency trading is the act of – you guessed it – trading cryptocurrencies. Depending on the level of knowledge you possess and the risk you are willing to take, you can either trade spot – purchasing crypto assets with immediate or ‘on the spot’ delivery – or derivatives – speculating on the price of different crypto assets.
How to find the best cryptocurrency exchange?
There are several criteria when trying to find the best cryptocurrency exchange:
Security: scammers are everywhere, but that doesn’t mean you should stop every move for them. Several exchanges have already set up their protection funds to safeguard their traders.
Trading volume: exchanges with large trading volumes are less susceptible to price manipulations and offer a more dynamic market.
Ease of use: how does it feel, to navigate their website? What’s it like if you’re not very experienced in crypto or trading?
As the world’s largest crypto copy trading platform and top 5 crypto derivatives exchange by trading volume, Bitget has been the go-to option for over 8 million users worldwide. With our $300 million protection fund, all our users’ assets will be in safe hands. Register now and enjoy our top-notch trading experience at Bitget!
Best cryptocurrency to invest
Although it is irresponsible and almost impossible to recommend the best cryptocurrency to invest in right now, there are several categories that are gathering momentum right now and could prove to be worthy investments.
Powered by zero-knowledge proof, zero-knowledge rollups (zk-rollups) are able to expand Ethereum Mainnet’s throughput by a large margin with extra privacy. ZkSync, one of the major players in this arena deployed their network late last month and has already garnered over $100m in total value locked (TVL). Check out our zero-knowledge zone for more exciting zk-rollup solutions.
Similar to zk-rollups, optimistic rollups are also layer 2 solutions that boost Ethereum’s transactions-per-second (TPS). Arbitrum, who took almost all the spotlight last month, is now the biggest layer 2 by TVL. Check out our Optimism zone, Arbitrum zone, and ARBETF products for the latest projects in the optimistic faction.
Blockchain and games have always been closely related 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 names. You can head to our GameFi zone to discover more fun games and tokens in this sector.
Of course, big players like BTC or ETH will always be good investments and even risk hedges. Cryptocurrencies can get quite volatile. However, please always do your own research and implement robust risk management before venturing in.
The future of cryptocurrency
Cryptocurrency has been growing rapidly despite its constant ebbs and flows, and many businesses are beginning to accept it as a valid form of payment. Overall, cryptocurrency is an innovative technology with the potential to shape the future of finance as we know it.