Best Cryptocurrency Exchange App

A beginner’s guide to cryptocurrency | Technology

A beginner's guide to cryptocurrency | Technology
Written by publisher team

The Los Angeles Lakers’ home game on Christmas Day against the Brooklyn Nets will be an upcoming party for the Arena, the new name for the facility formerly known as Staples Center. The goal of the rebranding deal – which will cost the Singapore-based company more than $700 million – is to promote as the best way to buy and sell cryptocurrency and related digital goods.

Today, however, only a fraction of the world of TV watching can explain the difference between bitcoin and an Amazon gift card, or between a non-fungible token and a Chuck eCheese token. The hype surrounding cryptocurrencies may be inevitable, but that doesn’t mean that people understand how they work or why some of their values ​​have shifted so dramatically.

Here are some basics to help you get up to speed. Don’t interpret any of this as an endorsement of cryptocurrencies, which are not particularly useful today as currencies and cannot be relied upon as investments.

What is cryptocurrency?

To understand cryptocurrency, it is useful to consider that Bitcoin rose from the ashes of the global financial crisis of 2007-08.

Created by an individual or group using the alias Satoshi Nakamoto, Bitcoin – the first cryptocurrency to gain a global foothold – has been described as a digital version of money that did not depend on banks and was impervious to government interference. Anyone can exchange bitcoins with anyone else at any time and for any reason.

But the cryptocurrency is only the first use of a technology called “blockchain” that is slowly spreading to (and possibly shaking up) other areas, such as real estate, music and gaming. The Bitcoin blockchain exists only for tracking bitcoins, but Ethereum and later initiatives use blockchains to run “smart contracts” — applications that can run on demand. As a result, blockchain offers an alternative not only to banks and government record keepers, but to computer servers.

The blockchain relies on a remote network of computers to store and update a permanent digital record of each transaction, eliminating the need for a central ledger or registrar. They use cryptography — mathematical techniques that turn information into essentially unbreakable code — to ensure that people who exchange bitcoins are who they claim to be and to enable computers on the network to keep identical and immutable records. This prevents bitcoins or any other asset tracked by the blockchain from being duplicated or spent more than once, although they can still be lost or stolen (more on that later).

Records on a public blockchain like bitcoin are open for all to see; Anyone can check the list of transactions (even as they are happening, although this is like trying to read the labels on boxes speeding up a conveyor) or track the activity of any individual account holder. But the identities of the account holders are encrypted, so you can’t tell who is behind the accounts doing these transactions.

But what is its value?

Cryptocurrencies are worth everything the market says about their value. Investors have pumped more than $2 trillion into bitcoin and other cryptocurrencies, all likely in the hope that future investors will be willing to pay more for them.

You can argue that this is all a provocation, conjuring money out of nothing. Technically, every bitcoin started as a payment someone would give themselves in exchange for doing the computer-intensive cryptographic work required to record transactions on the blockchain (an activity called “mining”). But its value depends on what people are willing to pay for it, which in turn depends on where people expect the price to go over time.

Bulls note that the supply of bitcoin is limited at a level that guarantees scarcity; There will never be more than 21 million bitcoins, while the world population is 7.9 billion and growing. In their view, the more widely Bitcoin is used, the more demand for it will drive price growth.

Bears argue that wild price volatility — bitcoin saw a boom and bust in 2021 — will deter most people from jumping on the crypto bandwagon. Also, cryptocurrencies may be affected by price manipulation and the whims of momentum-driven investors.

In a paper summarizing the economic research on bitcoin, Parthajit Kayal and Purnima Rohila of the Madras School of Economics in India warn that the price of bitcoin could drop to zero if the benefits offered by bitcoin are withdrawn by the government or the coins are hampered by fraudulent activities or in case a better alternative appears on the market.” There is certainly no shortage of alternatives. There are over 7,500 cryptocurrencies in circulation right now, according to

Is it really a coin?

As a medium of exchange, cryptocurrency leaves much to be desired. For starters, few companies accept these currencies as payment today.

The list of places where you can spend bitcoins includes a few tech companies, a few sports franchises, and a few retailers and restaurants around the world. There are solutions like Purse, which allow you to trade bitcoins for Amazon gift cards, but the need for such services underscores how weak an alternative cryptocurrency is currently for dollar bills.

One place you won’t be able to spend cryptocurrency today is Arena. Stephen Kalevowitz, chief marketing officer of, said the company is working on how to integrate the cryptocurrency-backed payment app and other products into the site and its other partnerships.

Equally important, bitcoin has not held its value in the short term, which is a key feature of any currency. The value of the US dollar crawls up and down compared to the currencies of other countries, and its purchasing power diminishes over time due to inflation. But it doesn’t jump 33% in a week, as bitcoin did in the first week of October, or lose nearly a quarter of its value in a week, as bitcoin did in mid-May. A 2017 study found that bitcoin prices are 30 times more volatile than the dollar, euro, or yuan.

Furthermore, you have to pay a fee to get cryptocurrency payments or other transactions added to the blockchain. These fees tend to be a small percentage of the transaction value, lower than what merchants pay to credit card processors. But if you want your transaction to be processed quickly, you may have to pay a larger fee. Otherwise, the wait may be hours or even days.

Given the huge price fluctuations and other flaws, why would anyone use Bitcoin or similar technologies as a medium of exchange? Perhaps because cryptocurrencies can be spent anonymously, like cash, but from a distance. This may explain why cryptocurrencies are the perfect choice in ransomware schemes and contraband purchases across the dark web.

For those who really want to use their cryptocurrency as currency, there is a class of tokens called stablecoins whose value is tied to the value of the dollar or some other non-crypto asset. The most famous of them is called Tether. Its creators pledge that each Tether token is backed by $1 in cash and other reserves (although the value of these reserves is disputed), and its price has remained at or close to $1 for most of its history.

What is it then?

For most people who buy cryptocurrency, it is an investment. But as the cyclical nature of the cryptocurrency markets indicates, they are not traditional.

Cryptocurrencies are not like stocks of companies, whose value is at least nominally related to something tangible (that is, the company’s prospects for growth and profitability). Nor is it like a commodity whose supply and demand can be predicted.

Instead, it more closely resembles a collectible item, such as a stamp, whose value is largely due to its rarity. There are no analytics, quarterly reports, production forecasts, or basic measures like earnings per share to guide investors. Instead, they have to rely more on any evidence they can find about which cryptocurrencies are enjoying momentum in the market.

According to Kayal and Rohilla’s paper, researchers note a number of factors that appear to be related to bitcoin’s values. The first is the geopolitical risks around the world. Bitcoin prices become more volatile as the index of those risks increases. Meanwhile, interest rates after inflation and tax burdens are “important in determining bitcoin prices,” they wrote. The researchers also found that bitcoin prices rose with increased stock trading volume but declined as stock prices rose, Kayal and Rohilla reported.

One of the final factors suggesting that cryptocurrency trading is an insider’s game: studies show strong evidence of price manipulation in bitcoin values. For example, a 2018 study on the doomed Japanese bitcoin trading site Mt. Gox reports that “Bitcoin prices have risen approximately 80% of the days when suspicious trading activity was recorded, while they have risen in a relatively smaller number of days, 55%, where no suspicious activity has been observed,” Kayal and Rowela write.

How do you start?

Most cryptocurrencies are available for anyone to purchase. All you need is a way to submit your application to the blockchain for the respective currency.

The simplest way to do this is to use an exchange, such as those operated by Binance and Coinbase. This is the cryptocurrency equivalent to a shopping mall, giving access to many cryptocurrencies. These sites usually provide a digital wallet that is very similar to a checking account, except that it is secured with a personal encryption key rather than a PIN. You deposit cash or cryptocurrency into the wallet, finance your purchases, keep track of your holdings and store digital receipts that track what you have bought and sold.

It’s called a “guardian” wallet, which means it’s stored in the cloud and maintained by a third party that can help you recover your password. One downside is that it relies on central servers that hackers can attack, as the BitMart exchange was this month, resulting in losses of $150 million or more in cryptocurrency. These losses may be covered by insurance, as is the case for BitMart. But sometimes they are not.

If you are concerned about this type of threat, you can perform another exchange transaction to transfer your holdings to a “fake” wallet in your possession. It can be a software application on your computer or phone, such as the MetaMask app, or a specialized, high-security USB drive (called a “hardware wallet”). Either way, it’s kept on your own – and if you lose your password, you’ve lost your cryptocurrency.

If you jump into a cryptocurrency pool, beware of the sharks. According to Chainanalysis, cryptocurrency users lost more than $7.7 billion in scams and other crypto-based crimes in 2021 alone.


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