Getting started with Crypto
Welcome to LearningBlockchains.com!
On this site you will learn about bitcoin, altcoins, cryptocurrencies, blockchains and more.
We cover how to use, buy, sell and trade coins, as well as the algorithms behind the techniques, how to run your own node and mine your own coins.
First, let's have a look at some terms. We won't be too technical with terms for now, and will clarrify some of these terms in later lessons. I should also point out that the exact definition of some of these terms is argued about, but leaving technicalities behind, let's have a look at the common terms:
- Cryptocurrency: A money system that is secured using cryptographic algorithms (in contrast, a country secures it's money with the law of the land).
- Bitcoin: The first really popular cryptocurrency and the most used cryptocurrency today.
- Altcoin: A cryptocurrency that is not Bitcoin.
- Blockchain: A record of transactions that is cryptographically secured. Cryptocurrencies work using blockchains.
- Hashing algorithm: A function that secures the blockchain.
- Wallet: A program that stores your cryptocurrency. You may need different wallet for different cryptocurrencies.
- Coin / Cryptocoin: A single unit of a particularl cryptocurrency. Think of these like US Dollars or your country's main currency notation.
Let's get you started with your very own cryptocurrency.
We are going to use a fun coin called Dogecoin, which is an altcoin that works very similarly to Bitcoin in many ways. It isn't worth much money, making it perfect for practicing trading, buying and selling. If you make a mistake, you don't lose much money.
This widget shows the current price for Dogecoin:
First, head to Dogecoin's getting started website and download either the Desktop or Phone wallet for your system. Ignore the Online and Paper wallets for now. Follow the instructions on the page for installing for your system. Once you have installed the wallet, you'll see that you have DOGE0 (i.e. no Dogecoin), and that is worth $USD0.00.
Second, we are going to get some Dogecoin into your account. You will need to click the QR code to get your receiving address. This address tells other people where to send their Dogecoin.
Your address will look something like this (this is my address!):
AA9q5XwDc19hsiBpZc4VqgMCiWmNCyx1zL
Next, head to a Dogecoin Faucet. A Faucet is a website that hands out free cryptocoins, usually in exchange for having adblock turned off, or watching a video. Some of these websites can be quite dodgy or potentially malicious, so be careful when following links to unknown faucets. One good faucet for free Dogecoin is Dogecoin Faucet. You can get around 1 Doge every 3 hours, and it pays out when you reach 20 Doge (most faucets do not pay out earlier, as the cost per transaction is 1 Doge itself). The official Dogecoin website also links to In Doge We Trust, and this seems like a safe website (although you should always ensure you practice safe web browsing by having antivirus installed on your computer and seeking technical help if anything weird happens). On that site, enter your Dogecoin address and complete the CAPTCHA to receive your money.
After this has been done, you might notice something weird. Your wallet doesn't show anything. In fact, it won't show anything for a while. Dogecoin, like most cryptocurrencies, is not instantaneous. Instead, the Dogecoin blockchain must be updated to include your transaction, and this can take quite a while. For Dogecoin it usually takes about a minute or two, but it can be more depending on the current network usage by other people. For Bitcoin, this process can take an hour, or even longer in some circumstances.
After a short delay, the Dogecoins should show up in your wallet. Congratulations, you now own some cryptocurrency!
Now that's done, here are some important notes before we go too much further.
- With any Cryptocurrency, you are transfering items of value. Check with your local tax authority on how Cryptocurrencies are taxed and managed. You many need to comply with additional laws.
- With a wallet, you become your own bank. In other words, you are responsible for your security. A later lesson will cover security concepts, but for now, ensure you store any passwords safely and have at least a PIN on your phone, as the coins are stored on your phone itself!
- If you change your mobile device, you need to move your wallet first! If you are swapping out your mobile device, check with your wallet's instructions on how to move your coins to another wallet before you start.
Here are some additional Faucets.
When searching for other faucets, be careful! Some are quite shady. Never install software onto your computer or give personal information in return for free cryptocurrency.
Please note that I use referral links above. Further, also keep in mind the monetary value of Dogecoins is quite low. Spending lots of time on Faucet websites will usually only net you a few Dogecoin, and less than $USD1 per hour. Have fun, but don't expect to get rich this way!