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Beginner's Guide
Crypto is easier when you don't do it alone. Start here and join the community. This practical guide will take you from blockchain basic to crypto ready.
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We built this guide to help onboard new people, just like you, to crypto.
Remember when people thought the "internet" was a crazy idea? We're in similar times, but people are no longer questioning the “world wide web” and now scratching their heads at this new technology: blockchain.
Every successful person in crypto took the time, just like you are now, to learn more about the technology. Education is the most powerful thing you can have in this industry because it builds confidence. When you're crypto confident, you wont make irrational decisions on your investments or how you're spending your time.
We understand you're probably eager to start "ape-ing" into your first coin and hoping you'll retire in 2 months. We're here to keep things real, fun, and engaging. If you want to make it in crypto, you need to start learning about the technology and see if it's exciting to you. If you don't find the passion for it, no worries! You can still invest in a few cryptocurrencies. But, invest the time in yourself to understand the technology before investing your money.
WAGMI. We're all going to make it.
Cheers 🥂,
Blockspace Community.
What the heck is blockchain anyway?
$11.6 trillion in transactions happened on the Ethereum Blockchain in 2021. This is more than the total volume of Visa 🤯. It's all possible because of blockchain technology, also known as "crypto".
Have you ever used Google Sheets? Where you can go online, see, and add to the same excel tables you have access to or even download a recent copy. That's a good way to think about blockchain.
Blockchain is a massive ledger (big 🍑 database of transaction records, think lots of rows of in excel) that anyone can see the latest version of and verify the details of each transaction. But unlike Google Sheets, you can't go back and edit an old transaction record once its published. This giant ledger is distributed, meaning anyone can access a public a copy of it. This makes blockchain "immutable" and secure. It's always running because of how many active copies there are and how many people (nodes) are randomly selected to verify new transaction records.
The most distributed, the more secure. Because it's owned by everyone participating in the network, it gives everyone a shared interest in seeing its success.
It's like being able to own the "internet".
Learn more about crypto below
Alexandria
Great learning resources for all things crypto from the makers of CoinMarketCap.
Binance Academy
Learn all about blockchain & crypto through Binance Academy.
Bankless
This media outlet has the most current news and a great set of guides on how to go "bankless" by leveraging crypto.
Must have crypto education
Wallet Required
These are popular places people go to keep a pulse on the industry and to learn new things.
It's time to pick your cypto account.
Don't worry, it's not that hard. Once you've made the decision to start investing in crypto, the first thing you'll need to do is set up a crypto account on a centralized exchange. These centralized exchanges are regulated places that help everyday people turn their cash into cryptocurrencies and vice versa. It would be similar to a brokerage account you'd setup for trading stocks on the stock market, but for the crypto market, we use centralized exchanges.
You'll need some crypto to start using Web3 apps and buy NFTs. Why? Remember going to an arcade growing up and you had to pay tokens to use the machine? Cryptocurrencies are your tokens to use applications and do things in crypto.
Here are the top three exchanges we'd recommend when getting started
Best for USA residents 🇺🇸
Gemini
Remember the Winklevoss twins from Facebook? This is their centralized exchange.
Coinbase
The leading centralized exchange in the US.
Crypto.com
One of the leading exchanges and arguably the most well known due to their sports advertising.
Best for Non-USA residents 🌎
Centralized vs. Decentralized Exchanges
There are two types of exchanges (markets) people use to buy and sell cryptocurrencies, centralized and decentralized exchanges.
Centralized exchanges are similar to brokerage accounts when you buy & sell stocks. The difference here is that centralized exchanges focus on cryptocurrencies. Decentralized exchanges (DEXs) also allow you to buy and sell cryptocurrencies but the transactions are peer-to-peer (P2P) or peer-to-contract (P2C). You have complete control and ownership over your funds and the smart contract technology facilitates the trade.
How do centralized exchanges work?
Centralized Exchanges like Coinbase purchase crypto directly from the blockchain and then sell it to the users on their platform for a fee, usually around 2%. This is the fastest way to change your fiat (normal cash like USD) into crypto. There is more consumer protection with Centralized Exchanges as most need to adhere to common banking and securities laws.
The caveat is that the Centralized Exchange is the one purchasing the crypto from the blockchain contracts. They are the ones that store and own your crypto, on your behalf, until you decide to move it off of the exchange. Generally, people move their crypto out of a Centralized Exchange once they are ready to start engaging with Decentralized apps like OpenSea, or to exchanges like UniSwap.
Do what your comfort and confidence level is. Most people will buy & sell crypto on a centralized exchange and never make it over to the decentralized markets that exist. That is OKAY!
How do decentralized exchanges work?
The power of blockchain is that it removes a lot of the "middlemen" in a transaction and creates more balance between the buyer & seller bringing them closer together. This is important because it significantly reduces the cost and speed of any type of agreement. Instead of having middleman-like brokers to facilitate a transaction, transactions on a blockchain are executed through smart contracts that determine the terms of the agreement and the conditions to be met for it to be validated. Decentralized exchanges run on smart contracts.
Most DEXs make money on the trading volume (far less than 2%) and the appreciation in value of their own token.
Top decentralized exchanges
Best for USA residents 🇺🇸
Uniswap
Great learning resources for all things crypto from the makers of CoinMarketCap.
Kyber
Learn all about blockchain & crypto through Binance Academy.
ShapeShift
This media outlet has the most current news and a great set of guides on how to go "bankless" by leveraging crypto.
Best for Non-USA residents 🌎
The different types of cryptocurrencies
There are over 18,000 different cryptocurrencies. That can be pretty overwhelming. It's best to break down cryptocurrencies into a few main categories and then research which crypto you think is the best investment.
Stablecoins
What are stablecoins?
Most people are intimidated to invest in the crypto market because of how volitale it is moving up and down more than 10-15% in a given day. Stablecoins don't move. They stay pegged to 1 dollar.The first type of crypto you should familarize yourself with are stablecoins. Stablecoins are cryptourrencies that are pegged to a specific value like the US Dollar and don't fluctate from it. That means that 1 stablecoin = 1 USD.
What are stablecoins used for?
Stablecoins are used to turn your cash into crypto. Instead of swapping your cash for crypto each time, you can convert your crypto into a stablecoin that is representative of $1. This helps you avoid conversion fees each time you want to move out of a position.
Understanding the Layers of a Blockchain
Layer 1 = The Blockchain (i.e. Ethereum)
Layer 2 = Infrastructure built on the blockchain to improve speed or security (i.e. Polygon)
Layer 3 = All the apps (i.e. OpenSea)
Layer 1 Blockchains
Layer 1 blockchains are blockchain networks like Ethereum, Bitcoin, Solana, Avalanche, and more. They are what's known as the settlement layer where all the transactions are ultimately stored. Think of this as the "database".
Layer 2 Scaling & Infrastructure Tokens
One of the challenges of a blockchain is that there is only so much blockspace to record a transaction. Let's compare a blockchain to Uber. When there are plenty of drivers available, the prices are generally pretty low, but during peak times the prices can increase to help balance the drivers and riders.
In crypto, when the demand is really high for the blockspace, the fees to complete a transaction are more expensive. Layer 2 scaling solutions complete transactions off of the Layer 1 blockchain (to remove congestion on the network) and then post just one transaction back on to the main settlement layer (the Layer 1 blockchain).
Comparing this to city traffic, we might take side streets for a little bit before jumping back onto the freeway to make it to our destination faster. Layer 2 scaling solutions (like Polygon) are the side streets and Layer 1s are the highway (Ethereum).
Layer 3 Applications
Layer 3 are all the applications being built on top of the Layer 1 blockchains and Layer 2 infrastructure. Examples of Layer 3 solutions are going to be NFT Marketplaces, Decentralized Exchanges, etc.
What is Web 3.0?
Web3 is the next evolution of the internet, giving ownership to creators and communities. Here's a quick way to think about the evolution from Web 1.0 to Web 3.0.
Web 1 = Blogs & eCommerce (Pets.com)
Web 2 = Apps and platforms (Twitter, YouTube, Facebook, etc)
Web 3 = Communities and ownership (OpenSea, Audius, etc)
What's the difference between Web 1.0, Web 2.0, and Web 3.0?
Web 1.0 is the earliest age of the internet when people only posted blogs or content sites, Web 2.0 introduced apps like Twitter, Web 3.0 introduced apps built on the blockchain and gives the ownership back to the content creator and communities.
When a user creates content on Web 2.0 (like Spotify), they don't own the content or even their list of subscribers. The platform will pay the content creator for their audience size and advertisements but often take a huge chunk of the potential profits. In Web 3.0 the creator of the content (musician) and the consumer (listener) get pulled closer together. Platforms like Audius recognize this potential and enable musicians to publish their own content without having to go through and sign with a record label.
What are the benefits of Web 3.0?
The future of Web 3 is when communities share in the creation and ownership of the content.
Tools to help you
Get these apps to help you navigate Web 3.0 and crypto
MetaMask
Wallet with over 21 million monthly active users. Use it as your gateway to Web3.
Zapper
Once you have a wallet, use this tool to manage your transactions, find new ways to earn and more.
Ethereum Name Service
Turn your crazy wallet address into something people can understand with a .ETH address (yourName.eth)
DeBank
Keep up with top profiles in Web3 to see what crypto they hold, NFTs they have, and more.
Now that you're setup. Start engaging.
There are several different paths you can take in crypto. Here are a few paths people consider.
HODLRs
People who just want to buy crypto, forget about it, and hope they are rich in a few years. These people are called HODLRs. Or "Hold on For Dear Life".
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Traders
Most people want to start actively trading cryptocurrencies. Jump over to the crypto finance page to find more ways to earn.
Collectors
Once you have a wallet, use this tool to manage your transactions, find new ways to earn and more.
Contributor
Want to start contributing to the success of crypto? There are tons of internet communities with bank accounts (DAOs) needing skills of all types.
