Starting with Bitcoin, cryptocurrencies have introduced a truly novel form of money (and more) to the world. The thing which unites and makes this asset class special is the technology referred to as blockchain; a set of algorithms and rules that constitute a distributed digital network where each participant (e.g. holder of a cryptocurrency) can be sure that their balances are correct and accessible — without trusting a central intermediary, like a bank. Ethereum, the second biggest cryptocurrency today, proved that blockchains are useful for more than just simple money transfers; it allows people to build decentralized apps, which, in less than a decade, has resulted in an explosion of Decentralized Financial (DeFi) protocols, and tokens of all kind, including NFTs. There are thousands of cryptocurrencies today with many created each day — it is important to understand the purpose and background of a token before buying it.
Bitcoin is the first trustless internet-native currency. Since its blockchain ledger is distributed and open, anyone is free to use it, as well as able to verify that its rules are maintained and noone is spending more than they ought to be able. This is different from "regular" online money transactions, made with e.g. Visa or PayPal, where the service provider can potentially shut you out if they feel like it, or are told to by a government. BTC in particular is commonly referred to as digital gold, and many people have used it as shelter from inflation in e.g. Turkey or Venezuela. Other crypto assets can have different use-cases; Ether, for example, is needed to run the various dApps built on the Ethereum network.
As a nascent asset class, cryptocurrencies are infamous for their high volatility. Even though early investors in today's biggest cryptocurrencies have gained generously over time, it is easy for the faint of heart to panic sell when prices are dropping sharply; it's important to understand what we're holding in order to have conviction in times like those. As mentioned, the premise of cryptocurrencies in general is the removal of trusted intermediaries, and distributing the responsibilities which belonged to them in traditional financial systems over the whole network. This is a double-edged sword, however — there is no customer support to revert your transaction if you send your coins to the wrong place.
Cryptocurrencies backed by blockchain technologies have various benefits over fiat money. Some people buy them as investment or saving vehicles, speculating that their value is going to increase in the future. Others may turn to them because traditional banks are unreliable or less convenient than cryptocurrencies. A traditional wire transfer between countries, for example, can take several days or more. Blockchain-native stablecoins allow people to do similar value transactions within a few minutes, without the added risk of price instability.
Buy, exchange and grow your crypto securely with a Ledger hardware wallet, combined with the Ledger Live app. It’s never been easier to keep your crypto safe and accessible.
Coinbase is the most trusted cryptocurrency platform, and an ideal starting point if you're new to crypto. They started in 2012 with the idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Today, they offer a trusted and easy-to-use platform for accessing the broader crypto-economy. _When you deposit on a centralised exchange you receive an IOU for your tokens, which shows up as your wallet balance. When your tokens are held on a centralised exchange, you don't physically own them – the exchange does, and you may lose them._