"Crypto for Dummies. Part 3: step-by-step instructions on how to buy a crypto coin
Kyiv • UNN
Olena Sosiedka, co-founder of Ukraine's first fintech ecosystem, Concord Fintech Solutions, explained the key aspects and sectors in the cryptocurrency world. She also explained how to buy a cryptocurrency step by step.
Cryptocurrency is a new type of money based on blockchain technology that allows for secure transactions and ownership of assets without the need for a central organization such as a bank. Olena Sosiedka, co-founder of Ukraine's first fintech ecosystem, Concord Fintech Solutions, told UNN about the key aspects and sectors in the cryptocurrency world and explained step-by-step how to buy a crypto coin.
Centralized and decentralized crypto exchanges
According to her, cryptocurrency exchanges are divided into:
- centralized - these are online platforms for buying, selling, and exchanging cryptocurrencies that are managed by companies and control your transactions and storage of money. For example, these are Binance and Coinbase exchanges;
- decentralized (DeFi) - platforms that allow users to interact directly with each other without intermediaries. For example, exchanges such as Uniswap allow users to exchange cryptocurrencies directly through their digital wallets, such as Metamask, without the need for registration or verification.
"FTX was one of the largest centralized exchanges that suddenly went bankrupt, resulting in the freezing and loss of user funds. This case highlights the risks associated with storing assets on centralized platforms where users do not have direct control over their funds," Sosiedka said.
Innovative programs in the world of crypto
The expert emphasized that there are many innovative programs in the cryptocurrency world that allow participants to fully utilize the opportunities provided by the new digital economy. For example, Phantokens, NFTs, DAOs.
Fantokens are special digital coins that allow sports and entertainment fans to interact with their favorite teams and artists. For example, holders of fantokens can vote for the songs played at stadiums or choose the design of a team's uniform.
NFTs (non-fungible tokens) are unique digital assets associated with art, collectibles, and even game elements. Games based on Play-to-Earn technology, such as Axie Infinity, allow players to earn real money by completing tasks and selling or exchanging their NFTs.
Tokenized stocks allow you to invest in the securities of large companies by purchasing them in installments in the form of cryptocurrency. This makes investments more affordable because it does not oblige you to buy the entire share.
DAOs (Decentralized Autonomous Organizations) are organizations that are managed entirely through the blockchain. That is, all decisions are made by the community through a voting system, which ensures a high level of transparency and gives each participant the opportunity to influence the management of the organization.
"Cryptocurrencies and blockchain offer new opportunities for investment, asset management, and even entertainment. Understanding the diversity of sectors in this space - from centralized and decentralized platforms to innovative applications - allows participants to take greater advantage of the opportunities offered by the new digital economy," Sosiedka said.
However, she emphasized that each of these sectors has its own peculiarities and potential risks, and it is important to take a conscious approach to investing and participating in these projects.
How to buy cryptocurrency
The expert also provided step-by-step instructions on how to buy cryptocurrency on centralized and decentralized exchanges.
Step-by-step instructions on how to buy crypto on centralized exchanges (using Coinbase as an example):
1. Register an account: Go to the Coinbase website and create an account by filling in the required fields (email, password).
2. Verification: To buy cryptocurrency, you need to go through a verification process. You may be asked for a photo of your passport or driver's license.
3. Connect payment method: Add your bank card (must be a non-Ukrainian bank card) or bank account to your Coinbase account. This will allow you to make purchases directly from your bank account or card.
4. Buy cryptocurrency: After adding a payment method and verification, go to the purchases section, select the cryptocurrency you want to buy (e.g. Bitcoin), enter the purchase amount and confirm the transaction.
Instructions for purchasing coins on decentralized platforms (for example, Uniswap):
1. Setting up a wallet: To get started, you need an Ethereum-compatible wallet, such as MetaMask. Install the MetaMask extension on your browser and create a wallet.
2. Buying Ethereum: Since most transactions on Uniswap take place via Ethereum, you need to first buy Ethereum through a centralized exchange or other services and transfer it to your MetaMask wallet.
3. Switch to Uniswap: Go to the Uniswap website and connect your wallet using the "Connect Wallet" button.
4. Exchange for another cryptocurrency: Select Ethereum as the source currency and the cryptocurrency you want to buy as the target currency. Enter the amount of Ethereum to be exchanged and confirm the transaction. Uniswap will automatically process the exchange and the new cryptocurrency will appear in your wallet.
Recall
UNN has launched a series of publications that will tell about digital currencies and their possibilities. Our first material was devoted to the technology underlying cryptocurrencies - the blockchain: "Crypto for Dummies". Part 1: what is blockchain and its "features" that few people know about.
The second article is about bitcoin halving: Crypto for Dummies. Part 2: what is halving and why it causes a stir in the cryptocurrency market.
