Mastering Crypto

Your Essential Guide to Understanding and Using Cryptocurrency. From the basics of blockchain to advanced security tips, this guide covers everything you need to navigate the crypto world confidently.

Fri, May 17, 2024

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Your Essential Guide to Understanding and Using Cryptocurrency

On October 31, 2008, an 8-page whitepaper was published on a niche tech forum. The paper challenged one of the pillars of modern civilization — our monetary system. It asked how we could send and receive money without the need for intermediaries. The answer it presented was genuinely revolutionary, a combination of innovative ideas from the fields of cryptography, game theory, theory of probabilities, data and network architecture, finance, and economics.

This was done without institutional backing and was authored by an anonymous person whose identity was hidden. Is that intriguing enough? Let's dive into the crypto world!

In this article, we provide the essential information to understand the crypto industry, easy instructions for various activities such as buying, storing, and transferring crypto, and some security and safety tips.

Are you looking for tips on what to buy and when? I'm sorry, but you will NOT find any investment insights in this article. Cryptocurrency investments are risky and subject to the same regulations as other trading activities. We will help you navigate some legitimate resources and tools for researching and understanding them. You must take advantage of this important spark of human thought.

What is Blockchain?

The 2008 white paper talks mainly about Bitcoin, a “peer-to-peer electronic cash system”, yet it also boasts the first mention of another revolutionary technology: blockchain. To understand blockchain in easy terms, let's follow the step-by-step reasoning that led to its invention:

  • We have a worldwide web, and everyone is connected, yet we still transact values through intermediaries. Could we send digital values (digital assets) over the web without intermediaries?
  • Digital assets are not like information assets. If they are duplicated (double spent), their value is lost. Trusted intermediaries, like banks, help keep our accounts (ledgers) and ensure people don't cheat.
  • We must take over their jobs and keep the ledger ourselves to make peer-to-peer transactions without intermediaries. The solution is a distributed ledger where everyone can read and verify all transactions!

A distributed ledger is a nice idea, but it is difficult to implement. In such peer-to-peer arrangements, security, synchronization, and consensus (whose version is correct) can become a developer's nightmare.

Bitcoin's whitepaper proposed a unique database architecture to solve this problem: transactions are registered in discrete blocks, and no one can modify past blocks. To prevent alternative branches of blockchains, adding a new block requires a “proof-of-work” – a special CAPTCHA. This computation can adjust the difficulty to control the speed of block creation, ensuring a consistent and secure blockchain.

Since the original Bitcoin blockchain idea, thousands of implementations and variations of the same decentralized ledger idea have occurred. (This suggests that the problem has actually not been solved.) Some blockchains are faster than others yet compromise on security; others are fast and secure yet work in small test environments and cannot be scaled.

Nevertheless, they all have one thing in common: they contain and manage digital assets. Sometimes referred to as tokens, coins, cryptocurrency, crypto assets, or just crypto, these units can travel on their designated networks and help people send values between themselves.

Making Transactions with Crypto

Let's begin with how to own cryptocurrency.

It would be best to have a crypto wallet to receive, store, and send crypto. Unlike regular payment wallets such as PayPal, your assets are not tied to a specific wallet brand. Crypto wallets are similar to browsers, providing access to the blockchain where your crypto lives.

However, crypto is always tied to the blockchain on which it originated. Each blockchain supports its own crypto set. Bitcoin blockchain has its native bitcoin (BTC), Ethereum has ether (ETH) and a whole universe of tokens anyone can create. SORA Network supports XOR, the network utility token, and other native tokens like VAL and PSWAP.

Crypto wallets can support multiple blockchains. For each blockchain, users should create a separate address (a public key). Users need private keys to access those. Think of it as your login and password. The public key (the address) can be shared with a counterparty, while private keys should be kept secret. For users’ convenience, public keys can be found in QR codes, while private keys are stored in a set of English words (your secret phrase).

You can receive and store your crypto on your address on the blockchain (and use it with your securely stored private key). There are many ways to earn crypto, but the most common for a newbie is to buy it. Crypto exchanges convert your fiat currency (USD or EURO) to your preferred crypto. Once purchased, the exchange allows you to transfer the crypto to your address (public key).


Crypto cards are among the most popular methods for on- and off-ramping crypto. They are also one of the most convenient ways of storing and using crypto on the go. SORA Card elevates this convenience even further by seamlessly integrating with major financial networks, ensuring that users can effortlessly manage, spend, and convert their cryptocurrency into fiat in real time, making it an essential tool for novice and seasoned crypto enthusiasts.

Safe With Crypto

Self or Third-party custody

Storing crypto is possible through third parties such as specialized custodians or crypto exchanges. In this case, you trust the third party to keep your funds under their custody on their blockchain accounts. Such wallets are called custodial wallets. The advantage of such wallets is if you lose your credentials, your funds can be restored when you verify ownership correctly. Nevertheless, keeping significant crypto funds in non-custodial wallets (or self-custodial) is standard. It is important to remember that with self-custodial wallets, lost private keys (secret phrase) cannot be recovered, and the respective funds are forever lost.

Hot and Cold addresses

Self-custodial wallets can be further broken down into hot and cold wallets. Wallets easily accessible from devices and the web are classified as hot. Those are convenient for frequent use and should not carry large crypto balances. You should regularly transfer large balances and keep them on cold wallets that are not easily accessed, for example, “air-gaped” from the web. A cold wallet can be as simple as a printed piece of paper stuffed between the pages of a book or an encrypted USB locked in a safe. Either way, it's a physical holding of your stored crypto offline.

Using Crypto

Satoshi Nakamoto's (Bitcoin's anonymous creator) idea was to create digital cash to help people transact without fees and restrictions. However, digital assets found their first validated use niche in speculative trading. The price of Bitcoin and other crypto is thus very volatile, and using it as money is currently not convenient.

A subcategory of crypto called stablecoins is a digital asset that travels on blockchains but strictly references the price of some official currency (most commonly USD). The most popular stablecoins, such as Tether's USDT and Circle's USDC, belong to centralized private companies that maintain the peg to USD and only utilize the blockchains for fast and secure transfers. Stablecoins are popular in countries with underdeveloped payment systems and troubled monetary systems.

Investing is commonly associated with major cryptocurrencies such as Bitcoin and Ether, although some HODLers (long-term holders) keep second and third-tier coins in anticipation of wider adoption of the respective networks. Some crypto assets provide opportunities for interest if staked (locked to a particular blockchain network) or lent on Decentralized Finance (DeFi) platforms.

A unique digital asset type (there can only be one or a very limited amount) is called a non-fungible token (NFT). This type of asset is popular among artists, gamers, and other creative industries where single ownership is valued (like a work of art). After a hype period, this digital asset class is used mainly for speculation.

Crypto investing is becoming mainstream with the introduction of traditional funds that allow investing in crypto without technical burdens such as maintaining self-custodial wallets. These funds provide access to significant crypto, such as Bitcoin and Ether. Bitcoin futures, Exchange-Traded Funds (ETFs), and Trusts maintain a substantial share of Bitcoin trading activity.

Any use of crypto, be that for trading or transfers, speculation or investing, stablecoins or NFTs, is regulated by the respective jurisdiction's laws. Crypto regulations differ by jurisdiction and may be subject to interpretation because of an underdeveloped regulatory landscape. In other words, it's worth staying up to date with your local laws.


Blockchain, decentralized ledger technology, and cryptocurrency are brilliant and exciting inventions of modern times. As with all new technologies, crypto has many uncertainties and imperfections. It is still in an early stage, yet it is already certain at this point that it will stay in one form or another. We hope this overview has opened you up to exploring and mastering this technology, enjoying the new opportunities it brings, and even inspiring you to contribute to its development.

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