It’s all about having the proper information, as even one small mistake can be a determinative point on whether you will make or lose money. Yes, it’s that simple yet complex at the same time, and what people have trouble the most with today is understanding the cryptocurrency and, more accurately, the cryptocurrency market.
To mine or not to mine, that is the question
We all know about mining, what it is, and its role in our society, as even today, it represents one of the most physically demanding jobs in the world. Today, this word has a much greater meaning, as it is used to describe the essential part of blockchain technology. Namely, if there weren’t for miners, many cryptos would not exist as their role is to verify and validate transactions, and for doing so, miners get a reward. When it all started, the principle was actually pretty simple, and the more people began to mine and invest in cryptos, the more the price of those cryptos spiked up. Of course, like with most things, when something is new, the chances are high that there is some mistake, and here, with mining, the biggest mistake is about the way miners are rewarded.
How are miners rewarded?
Namely, for most cryptocurrencies, whether some miner will get a reward depends on how great computing and processing power they have, or, to make it even clearer, whether they have the best graphic cards and how many of them. It’s pretty obvious that this system (PoW) isn’t fair because, once again, those with enough money are more likely to create mining farms and get a reward. But, there is no need to worry, as today, there is a much fairer solution, and it’s called PoS. Proof of stake represents the ideal and more realistic concept, where miners get a reward regardless of how great their graphic card is. Saying that PoS is a much better concept would be an understatement as the benefits of PoS are much greater, and the whole minting process, yes minting and no, it’s not a typo, is much less costly and much more efficient for you.
Understand the difference between wallets
People who want to start their journey in the crypto world need to know that there are two types of wallets that they can choose from to manage their digital money, and it is impossible to do it without one of them. The first type is hot, and the second one is the cold wallet. The main difference between these two wallets is that hot ones are always connected to the internet, while cold ones do not need to be connected to the internet. When it comes to security, cold wallets are much safer because they are usually hardware that cannot be easily hacked like the hot ones, which can be an easy target for hackers because of the constant internet connection they require.
Choose the best coin
The crypto market is expanding all the time, which means that we can find many new coins every day. Being skeptical about new coins is a normal thing, but it does not mean that there are not some of them that we can use. There are different cryptos for different uses, and it depends on us what we need them for. For example, we have BSU that can be used to store necessary data on a decentralized Inery database, and if that is what we need, it can be the best choice for us. That means we need to do proper research before we choose the best crypto for us, and after that, we can use it without any fear.
Make sure to understand that the cryptocurrency price is constantly changing
The main difference between cryptocurrencies and fiat money is the fact that they are highly volatile. Since cryptos are decentralized and not regulated by any state laws, their price can vary a lot in a short amount of time. It is not necessarily a bad thing because it can bring us a lot of profit if their price increase rapidly, but on the other side, we can lose a lot of money if it decreases. It is almost impossible to predict when the price will increase or decrease, but we need to understand both possibilities before we enter the crypto market.