Bitcoin Basics: How to Get Started - Decrypt
12/09/2023 16:46
A primer of Decrypt's stories that explain what you need to know about Bitcoin, Ethereum and other cryptocurrencies.
A primer of Decrypt's stories that explain what you need to know about Bitcoin, Ethereum and other cryptocurrencies.
CollectionLast updated Dec 1, 2023
What is the Bitcoin Halving? How Bitcoin's Supply is Limited.
Every four years, the amount of Bitcoin doled out to cryptocurrency miners halves in a process imaginatively known as Bitcoin halving (or halvening). Here’s why—and how—it works. Bitcoin’s supply limit To understand the Bitcoin halving, we must first understand the theory behind its supply. The inventor of Bitcoin, Satoshi Nakamoto, believed that scarcity could create value where there was none before. After all, there’s only one Mona Lisa, only so many Picassos, a limited supply of gold on Eart...
What is the Lightning Network? Bitcoin's Scalability Solution.
Bitcoin has been hampered by its own popularity. Thanks to the way the blockchain is designed, the speed of transactions is slow and the cost of transactions has increased. Researchers, developers, and the Bitcoin community have been trying to come up with a way of allowing Bitcoin—and other cryptocurrencies—to accommodate more transactions. Their best efforts to date have focused around something called the Lightning Network. Can it fix the cryptocurrency's scaling problems? Speed and cost A bl...
What Are Crypto Futures, Coinbase's Latest Offering?
Coinbase announced on September 28, 2023 that it plans to launch its regulated perpetual futures contracts on its Coinbase Advanced platform (initially for non-US customers). Why futures? Partly because they offer investors a way of potentially taking advantage of the high volatility of most crypto. Let's use Bitcoin as an example. Spot trading—the practice of buying and selling Bitcoin—forces traders to exchange cryptocurrencies at their current prices. But what if there was a way to lock in t...
GBTC: Everything You Need To Know About The Grayscale Bitcoin Trust
Grayscale's two-year battle to launch a Bitcoin spot exchange-traded fund (ETF) may finally be turning a corner. On August 29, 2023, the United States Court of Appeals for the DC Circuit sided with Grayscale over the U.S. Securities and Exchange Commission (SEC) in the crypto firm's quest to launch a Bitcoin ETF. The price of Bitcoin rose significantly following the news. Bitcoin Surges After Grayscale Wins Appeal Against SEC The Grayscale Bitcoin Trust (GBTC), which was launched in 2013, enable...
What is Bitcoin Mining and How Does It Work?
Bitcoin mining is the process by which blocks of transactions are added to the public blockchain and verified. It’s also the process by which new Bitcoin is created—a mechanism that both secures the integrity of the blockchain and incentivizes participation in the network. Miners compete to add new blocks to the blockchain. Mining Bitcoin demands a substantial commitment on the part of miners; it’s a costly, time-consuming task, and one that’s necessary for the cryptocurrency to work and for peo...
Is Bitcoin an Investment or a Currency ?
Are you in the U.S. and haven't filed your taxes yet? Check out the free Decrypt U 2023 U.S. Crypto Tax Guide, and mint a free NFT certificate! Is Bitcoin a currency, or is it an investment like gold? Can it be both? We explore that idea and suggest where it might be going. What is money? There are three fundamental values to describe what money is, and what it does. 🏦It’s a store of value - you can save it and use it for later, knowing its value will remain. 💱It’s a medium of exchange - s...
What Backs Bitcoin?
Up until relatively recently (the last century or so), most ordinary paper currency and coinage was directly redeemable for gold. This is because many of the wealthiest countries followed the gold standard, a monetary system where governments tied a fixed exchange rate for national currency to gold. As part of this system, countries kept sufficient reserves of gold in their vaults to 100% back their circulating currency supply, ensuring currency-for-gold exchanges were always possible. However,...
What Are ERC-20 Tokens, Gas, ETH? Ethereum's Architecture Explained
To understand how the Ethereum network functions, you need to understand these three elements: ETH (Ethereum or "ether"), gas, and ERC-20 tokens. Collectively they help power the network, incentivize miners, and allow others to build their own tokens on top of Ethereum’s blockchain. What is ETH? The cryptocurrency ETH (or "ether") is the digital fuel for Ethereum. To power your car, you need to buy gasoline. To power your transactions on the Ethereum blockchain, you need ETH. On Ethereum, that E...
What is Ethereum (ETH)? A Beginner's Guide to the Smart Contract Blockchain
Ethereum, the second-biggest cryptocurrency after Bitcoin, is a blockchain-powered platform for creating decentralized applications (dapps). Where Bitcoin was designed as a currency and a store of value, Ethereum is a decentralized network for running smart contracts—code that runs on a peer-to-peer network and is verified by Ethereum's blockchain. The idea is to create applications that are secure, transparent and censorship-resistant, since they don't rely on centralized platforms. Ethereum ha...
What Is Ethereum 2.0? Ethereum's Consensus Layer and Merge Explained
The long-awaited Ethereum 2.0 upgrade is near. The multi-phased upgrade aims to improve the Ethereum network’s scalability and security through several changes to the network’s infrastructure—most notably, the switch from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model. What is Ethereum 2.0? Ethereum 2.0, also known as Eth2 or “Serenity,” is an upgrade to the Ethereum blockchain. The upgrade aims to enhance the speed, efficiency, and scalability of the Ethereum network...
What Is Ethereum Classic?
Ethereum Classic is a smart contract platform and cryptocurrency. Ethereum Classic (ETC) shouldn’t be confused with Ethereum (ETH), even though they were the same until an argument led to divorce. Below we explore what led to the split. What is Ethereum Classic? Ethereum Classic is very similar to Ethereum because it shares a common origin. It's a blockchain that allows other applications to be built atop it. These decentralized applications, or dapps, use code known as smart contracts so that p...
What is Proof-of-Work? How The Bitcoin Network Is Maintained.
The blockchain technology that powers Bitcoin and many other cryptocurrencies is essentially a database, but it’s far different from a typical, centralized ledger. It’s decentralized and powered by peer-operated nodes distributed around the world, with no supervising authority to call the shots. So how do you secure a decentralized network and ensure that everyone agrees on the contents of the ledger? That's where Bitcoin's proof of work consensus algorithm comes in. In combination with public...
What is Bitcoin?
—Bitcoin started it all. It was the first cryptocurrency, and it launched an industry that now includes thousands. But who invented it, how does it work, and why is it so important? What is Bitcoin? Bitcoin (BTC) is a peer-to-peer cryptocurrency. Think of it as a digital token. You can't physically touch or hold Bitcoins, and all Bitcoin transactions are logged on a public, decentralized, immutable ledger. The first official purchase using Bitcoin was for pizza in May 2010. Two pizzas from Papa...
DeFi: The Ultimate Beginner's Guide to Decentralized Finance
Decentralized finance, or DeFi, sits at the white-hot center of the recent crypto bull run. DeFi is crypto’s big thing at the moment, a little like how Initial Coin Offerings (ICOs) were all the rage back in 2017. Back in June 2020, just $1 billion was locked up in DeFi protocols, according to metrics site DeFi Pulse. By January 2020, "DeFi degens" had poured over $20 billion worth of cryptocurrencies into DeFi smart contracts. What is DeFi? So what is this powerful, wild beast known as DeFi?...
What Makes the Bitcoin Blockchain Secure?
Name a company, and, odds are, it’s been hacked. With 71% of hacks being financially motivated, it begs the question: Can the Bitcoin network be hacked, too? After all, it’s a tempting target. We never like to say never at Decrypt, but the answer is: pretty much no. Indeed, Bitcoin has proven remarkably resilient to shocks and stresses throughout its history. And while crypto exchanges have been hacked with depressing frequency, and their stores of Bitcoin redistributed, actually compromising an...
What are CryptoKitties?
Mention blockchain games, and one name is likely to come up over and over again: CryptoKitties. CryptoKitties is an online game where players buy, trade and breed adorable digital cats. So far, so familiar; if you were born in the 90s you'll probably remember Pokémon or Tamagochi. The 7 best blockchain games you can play right now But CryptoKitties has one key difference up its sleeve: each CryptoKitty is completely unique, represented on the blockchain by a non-fungible token (NFT). A pioneerin...
What is the Bitcoin Halving?
The inventor of Bitcoin believed scarcity could create value where there was none before. The Halving also known as the Halvening is due to occur sometime in May 2020. To understand it, we must understand the theory behind Bitcoin’s supply. We explore it more below. A bit about Bitcoin Bitcoin was revolutionary in that it could, for the first time, make a digital product scarce. This limited supply is one of the reasons the price of Bitcoin went from being worth nothing 10 years ago to $20,000...
What are Ethereum Tokens (ERC20)?
Ethereum’s ERC20 standard allowed thousands of companies to create their own tokens that have lead to an explosion in the ways blockchain technology can be used. We explain how that's lead to dozens of other currencies. What ERC20 did for blockchain Ethereum’s developers noticed that inside their eco-system dozens of people were creating their own tokens. But there was a problem: it was becoming increasingly complicated for those tokens to interact with each other. Ethereum decided to create a s...
What are Bitcoin’s limitations ?
As Bitcoin has become increasingly popular, some of its features have created bottlenecks - and in some cases lead to arguments over what direction the currency should head in. We look at the main problems with Bitcoin. Because no one person or group owns Bitcoin, working out how to fix or change some of these problems can only happen when everyone agrees. But sadly not everyone agrees on the best way forward. That has lead to a number of interesting developments in the currency. Problems with...
Is Bitcoin legal ?
Should you pay tax on Bitcoin? Are governments regulating it? Is it even legal? This guide is all about exploring what happens when Bitcoin bumps into the legal apparatus of a state. Is Bitcoin legal? It depends where you are. The vast majority of countries are fine with having its citizens buy and trade Bitcoin. But there are some places where that line is blurred, and others where governments are hostile towards it. 🇪🇺In the EU - The European Union has passed no specific legislation on Bit...