01
In simple terms, what is Crypto or Digital Currency?
Crypto or Digital Currency is a sub-class of 'Digital Assets'. Unlike fiat (cash) currency that can be transferred electronically, Digital Currency is not controlled by a bank or a middle man making it easier and faster to transfer and is more cost effective. Crypto or Digital transactions occur via an electronic 'ledger', and would be recorded in the same way as a traditional ledger book would.
02
Where do I keep my Digital Currency?
A Digital Wallet. Remember the wallet you used to carry around in your back pocket? It stored your cash, credit cards along with all of your receipts, parking tickets etc... A Digital Wallet is similar, but with benefits! It's an App that stores your public and private keys and interacts with blockchains so you can send and receive your digital currency and monitor your balance. Safer, simple to use and much easier on the back pocket of your jeans!
03
How is this Digital wallet more secure?
Public and private keys. OK, stay with us here… A public key or 'wallet address' is like your bank account number. Your public key verifies you are the owner of that wallet. Now, just like your bank account, your wallet address cannot be used by others on its own so sending or using your wallet address with someone else to transact is all good. Your private key is represented by your 'seed phrase'. When you first open a digital wallet, you will be asked to 'back it up' to secure it, and you are given your seed phrase. Your personal seed phrase is the most important part of your Digital Currency life. When you have your seed phrase, you MUST store it in a very safe and secure place. Some use bank deposit boxes, a 'hidden' compartment in their house, anywhere only you know and can remember really! This is the private key to your personal wallet and if you ever lose it, and need to update or reload your wallet, you will lose everything in your wallet. For more information on seed phrases, please click here.
04
So, how does my Digital Currency move from my wallet to someone else’s?
Welcome to the 'Blockchain'. Remember we mentioned the 'ledger' earlier? Well then, you already know what Blockchain technology is. Blockchain is the complete ledger of all transactions that have taken place in that particular ecosystem. Why 'Block' and 'Chain'. In simple terms, a block is a number of transactions done in a short period of time or to a certain Byte. These blocks are then stacked on top of each other creating a chain.
Digital Currency transactions are processed via the Blockchain. The transaction will be entered into the Blockchain, transmitted to a network of computers, confirmed by those computers, and then clustered together into the block, i.e. actioned. Once the transaction has been actioned, it is recorded in a block and is stored on the Blockchain forever.
05
What are these different types of Cryptos I hear about and which is better?
I think we should start by saying that different types of Cryptos or Digital Currencies are sorted according to their purpose so it really depends on what you are looking to achieve within this digital space. We have broken down three main types of Cryptos to give you some idea.
- Volatile Cryptos. You’ve heard of Bitcoin right? The 'mothership' of Cryptos. The pioneer of this new industry back in 2009. Bitcoin is the perfect example of a 'volatile' Cryptocurrency whose purpose is to be traded on an exchange. For the true speculator, which is where this industry started, this is a type of Crypto with a value that may increase or decrease significantly compared to its average price. There is no intrinsic value and this type of Crypto purely relies on 'buyer and seller' demand, hence its volatility.
- Stablecoins. One of the more recent Crypto, a stablecoin is a Crypto that is 'pegged to something'. For example, a 'fiat' collateralised stablecoin is pegged to a real-world currency like the USD. Another example, this time in a non-collateralised stablecoin is one that is pegged to precious metal, like gold. The key advantage of a stablecoin is that it minimises the volatility so people who are looking for a 'safer' or longer-term route tend to choose these.
- Utility Tokens or Coins. Welcome to Qoin! A utility coin is a digital asset designed to be spent within a certain blockchain or ecosystem. The perfect example is the Qoin ecosystem. Qoin went about building an ecosystem of merchants, willing to take on an alternative payment (being Qoin). To capitalise on their idle products and services. The fluctuation therefore within the Qoin community is determined by the number of merchants joining or leaving the ecosystem.
06
So, how should I get started?
This is a tough one. It will come down to what you want to gain out of it. Just like investment in the stock market or securities, are you after a short-term gain, long-term stability with a smaller return, or the best of both worlds? Qoin offers the ability for you to earn and spend within the community whilst your Qoin has the potential to grow in value. You then have the opportunity to exchange your Qoin for cash if you choose to do so (subject to any withdrawal limits). To download your Qoin Wallet, simply click here.