A Beginner's Guide to Investing in Cryptocurrency

It might feel like you’ve missed the boat if you’re still not investing in cryptocurrency in 2022. 

Every time you hear about someone who’s earned thousands (or in some cases millions) from their investments, you probably feel a pain in your chest from all that missed opportunity. 

The Blockchain

The words “cryptocurrencies” and “blockchain” tend to come together, and that’s because cryptocurrency protocols are built on the blockchain. 

A blockchain is effectively a database that stores all data related to transactions in a chain of blocks. Usually, new blocks are formed when new transactions take place, and all this happens without a third party. 

However, this process works slightly differently on different cryptocurrency protocols. For example, some projects have a public ledger where everyone can see all transactions, and others are more private.  

Proof-of-Work vs. Proof-of-Stake

Even if you don’t know much about cryptocurrencies, you’ve probably heard that bitcoin involves “miners.” 

This has attracted a fair bit of attention due to claims that the mining process requires too much power and is bad for the environment — to break the increasingly difficult cryptographic riddles, increasingly powerful GPUs are needed. 

This is known as a “proof-of-work” framework: miners are competing to validate transactions by mining. But not every cryptocurrency relies on mining to function.  

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