What is cryptocurrency? A beginner's guide
This guide covers everything you need to know about cryptocurrency and digital assets. What they are, how they work, how to trade them, and how they compare to traditional investments like stocks.
01 The basics
What is a cryptocurrency?
A cryptocurrency is a digital currency that operates on a decentralized network.
It is not issued or controlled by any government or central bank. Bitcoin was the first, created in 2009.
Unlike a stock, a cryptocurrency does not represent ownership in a company. Its price is determined by supply and demand.
Cryptocurrencies exist on a blockchain, a decentralized record of transactions maintained across thousands of computers.
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02 How to trade
How do you trade cryptocurrency?
Trading cryptocurrency works like trading stocks. You open an account, deposit funds, and place buy or sell orders.
Most cryptocurrency markets are open 24 hours a day, 7 days a week. There are no market hours.
When you place a trade, you choose a market order or a limit order. A market order fills immediately; a limit order fills only when the price reaches the level you set.
Spot trading is the most common way to trade cryptocurrency. You buy the asset at its current price and own it outright.
Markets never close
Cryptocurrency trades 24 hours a day, 7 days a week. You can act on news the moment it happens.
Stocks and crypto in one place
Trade both from one balance on one platform. No switching apps. No moving money around.
Start from $1
There is a minimum deposit of only $1 to get started. Put in $10 and you have a real position in the market.
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03 Crypto or stocks
Crypto or stocks: what is the difference?
Stocks and cryptocurrencies are both tradeable assets. They behave very differently.
A stock represents ownership in a company. Its value is connected to that company's performance.
A cryptocurrency like Bitcoin or Ethereum is not tied to any company. Its value comes from supply, demand, adoption, and market sentiment.
Some traders hold both. Stocks give exposure to company performance. Cryptocurrencies give exposure to a market that never closes.
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04 Bitcoin vs Ethereum
Bitcoin vs Ethereum: what is the difference?
Bitcoin and Ethereum are the two largest cryptocurrencies by market capitalization. Both are built on blockchain technology.
Bitcoin is designed as a store of value and a peer-to-peer payment system. Its supply is fixed at 21 million coins.
Ethereum is a programmable blockchain that supports smart contracts and decentralized applications. Its supply is not fixed.
For beginners, Bitcoin is usually the first asset people trade because of its name recognition.
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FAQ
What exactly is cryptocurrency in simple terms?
A cryptocurrency is a digital currency that no government or bank controls. It runs on a decentralized network maintained by many computers.
Does crypto turn into real money?
Yes. You can sell cryptocurrency on a trading platform and withdraw the proceeds to your bank account.
Can you make $1000 a month with crypto?
It is possible but not guaranteed. Crypto markets are volatile, so start with an amount you can afford to lose and focus on learning first.
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