Crypto Ed 101: Commonly asked crypto questions

Cryptocurrencies can be tricky at times for beginners to navigate through all the technological innovation. Therefore, we took sometime and decided to prepare a guide for most asked questions. These questions are of nature as such that individuals face them but they don’t know where to ask them.

So let’s get started.

What are the basics you need to know before starting Cryptocurrency trading?

Cryptocurrencies are the wild-west of investing world. The cryptocurrency market can be volatile at times. And therefore, when it comes to investing and trading, one should always have a calculated approach. The risks are tens and hundred times more than any non-crypto investments as cryptocurrencies at large operate in a non regulated market. So just in case something goes wrong, you have no protection whatsoever.

We have a very good blog on things you need to know before starting crypto investing that you will find useful.

How to decrease Crypto trading risk?

Trading techniques and portfolio management skills are one thing that can be advised. But that is not for everyone unless you really work on learning it. While you work on those, you can may be adapt diversification. Which doesn’t take really much to find a good combination.

There is a famous saying that goes by, “don’t put all your eggs in one basket”.

Diversification is the key when it comes to portfolio management. If one of your investment goes down, the others can minimize your losses. This way you have simply more opportunities to make good profits.

It might sound funny but for traders it’s a lifeline. It is something that keep you away from a hospital when you are up against the odds. Therefore, to decrease trading risk, diversification is your friend.

What is the best crypto to invest in?

Users often ask this question over the internet and the answer to this is subjective. Given that there are many factors that needs to be taken into consideration. But the irony is that those factors often changes when it comes to crypto projects. Therefore, one needs to be really careful when advising.

For the year 2022 we produced a list of coins that we think will make it one way or the other in the coming future. Read our top 5 list of crypto coins to invest in.

What’s the easiest way to not lose money in Crypto trading?

In Crypto, you only lose your investment when you cash out otherwise you can always get the chance to comeback. But there’s a catch.

The statement doesn’t hold true for all crypto, but rather the famous ones such as Bitcoin, Ethereum, XRP and others. Imagine the worse number anyone has bought either of them and then take a look at the all-time price graph, you will see the markets has given them opportunities to exit.

No one said crypto will always appreciate in value. Any money that anyone has lost in the market so far (except for scam coins and coins with no potential or lets just stick with Bitcoin) is solely because of the investment appetite of that individual.

The word investment only and only works well with extra cash. So, even if you are under-water or tight hands, you can still wait.

Do you need a crypto wallet to trade Bitcoin or other cryptocurrencies?

No, you don’t need a wallet to start trading. Wallet’s are only for storage, sending and receiving coins. For trading you need an Exchange to register with. You can register with Binance to get started with trading.

When you are trading, your coins are stored in the exchange wallet. So technically yes you need the wallet to trade as well, but that is done by the exchange on your behalf. So you don’t need to worry about that. Just open an exchange account, Buy Bitcoin or Crypto and start trading.

What is a blockchain consensus mechanism?

Blockchain consensus is basically getting all the network participants agreeing on a certain transaction. A consensus is said to be achieved when all the participants over the network agrees with a certain transaction. So what consensus mechanism essentially does is that it creates enough witnesses over a particular transaction.

There are many blockchain consensus mechanisms. The most famous one’s are:

1. Proof of stake – requires you to hold particular currency to be part of staking.
2. Proof of work – requires you powerful equipment to be part of mining.

What are NFTs and how do they work?

Non-Fungible Tokens (NFTs) continues to make headlines in 2022. Last year, we reported that global search interest for the “NFT” rose during 2021 and surpassed “Crypto”, the rather popular one. NFTs have been sold for astronomical sums ever since they flooded the marketing, starting with Cryptokitties

Before jumping into NFTs one really needs to understand the basics of it and how do they function. To understand NFTs and how do they work, read our complete guide.

What is a rare NFT?

Most users would associate a high price to a rare NFT but that’s not really the case. You will often find some super rare NFT with minimal prices. But is price really a factor in what constitutes a rare NFT. Of course not.

The characteristics of a rare NFT is self explanatory. An NFT is rare if there exist very few duplicates of it or it’s unique. The more that number goes down, the more rare that NFT will be considered. Price has little to do with an NFT’s rarity.

I hope this guide was useful. Let us know what are other such questions you would like to get answered.

Original link: Your go to Crypto place