Feeling late, or having FOMO?
Let’s get you started. While you’re not “early” to crypto anymore, you’re still not late overall. Crypto hit the mainstream last year.
Catch Up to Crypto
Bitcoin hit $1 Trillion is market cap in 2021, setting the major milestone for the fastest an asset reached $1T. Lots of people jumped in last year and got experience in crypto. People enjoyed the “NFT Craze”, Coinbase went public, and Tesla, MicroStrategy, and Block added BTC to their company’s balance sheets.
Bitcoin and Ethereum are widely known at this point. “Crypto”, or “Web3” has made its way into the spotlight and is experiencing rapid growth. Perhaps you have disregarded crypto for some time and feel like it is now too late to get involved and learn.
Maybe you’ve thought about buying BTC or ETH for some time but are afraid because you’ve heard on the news from political figures that they think it is worthless, or that it uses too much energy.
Maybe you only trade stocks, or only buy real estate and can’t get over the psychological barrier of it being 100% digital. You might hear about Elon Musk and Dogecoin and think it’s a big joke, or that Elon controls the price of bitcoin.
Some of these thoughts are pretty common from “newbies” who have heard all of these in the past while watching the news. You may know a little from some other friends who are familiar with crypto. What is common amongst all is feeling late. The number one thing people experience prior to getting involved with crypto are people thinking they have missed it.
They see the prices are “up and to the right” across the board after years of upward movement. They see the prices over the long term and feel like they missed out. Truth is, this “fear” is emotionally driven, and this couldn’t be further from the truth. Would anyone justify missing out on a large long-term opportunity because of their emotions looking back, or would they have rather discovered that there was more to it?
Adoption overall is still in its early stages; we have a lot further to go from here. Below is a chart of Blockchain wallet users worldwide from November 2011 to November 22, 2021 from Statista, numbered in millions.
There is rapid growth occurring on a global scale, and we’re still in the early stages. It’s hard to believe if you’ve never been involved in crypto after seeing all the growth and excitement these past few years. We now have on average ~ 5 million wallet downloads per month on a global scale.
The Market cap of crypto right now is right at $2 Trillion, with BTC making up 38% of the market and ETH holding 18% of the market currently. DeFi is sitting at 6.7% today with a lot of growth ahead. It is an alternative to the current financial system → DeFi is replacing the “legacy” financial system through smart contracts on the blockchain → through *code*. All you need is an Ethereum address to participate.
Bitcoin and Ethereum offer you a whole new way to deal with money. They make you the sole owner of your assets. Meaning that you don’t have to conduct your financial transactions through rent seekers as Bitcoin and Ethereum functions make middlemen completely obsolete. Bitcoin makes you your own bank, and Ethereum does that and additionally gives you the ability to lend out and earn yield on your crypto assets.
Crypto creates more efficiency where everything moves faster on a 24/7 basis. You have no middlemen, and as you embrace new technology you learn how you can gain from the global economy.
Getting You Started
Just like Bitcoin was created by the anonymous Satoshi Nakamoto, Vitalik Buterin is the creator of Ethereum. BTC is the cryptocurrency/crypto-asset used on the Bitcoin blockchain, and ETH is a cryptocurrency/crypto-asset used on the Ethereum Blockchain. It is more of an “Ethereum network” and understood as the “world’s programmable blockchain”.
“It is the world’s programmable blockchain, the foundation for our digital future, all you need is a wallet to take part. It build’s on Bitcoin’s innovation with some big differences.”– Vitalik Buterin
You use Ether/ETH on Ethereum. What do you need to use ETH? A wallet!
It is no surprise that currently *most* DeFi applications and projects are ran on Ethereum. Ethereum Dapps turns all of this into “programmable money”. Your wallet allows you to interact with things like decentralized applications, DeFi, and put your crypto to use! You get to engage with applications that allow you to earn crypto in a global economy.
DApps (Decentralized Applications) Decentralized application, at a minimum, it is a smart contract and a web user interface. More broadly, a DApp is a web application that is built on top of open, decentralized, peer-to-peer infrastructure. Many DApps include decentralized storage and/or a message protocol and platform.
One of the bigger and more popular developments lately has been the rise of Play to Earn (P2E) gaming, and Axie Infinity is one of the leaders in this space.
In the P2E field Axie is a big name, but it goes much further than this.
“Blockchain-based games are sowing the seeds of a new micro-economy. One where gamers around the world are able to generate monetary value doing what they love, playing games.”theDefiant
This is much different than playing Halo in your basement. This opens up the entire world to a new competitive gaming structure, and broadens the ecosystem.
“The internet opened up all kinds of opportunities for gamers to make money playing games online and do what they love most. Nowadays there are professional gamers and content creators earning millions while there are plenty of stories of community members being hired by major game developers. However, the majority of the gamers will never earn a penny and will just spend money on their favorite hobby. Blockchain gaming has the powerful ability to change this and bring more power to the gamer.”dappradar
DeFi (Decentralized Finance) Short for “decentralized finance,” a broad category of dapps aiming to provide financial services backed by the blockchain, without any intermediaries, so anyone with an internet connection can participate.
NFTs (Non-Fungible Tokens) Cannot be replicated. NFTs can be tracked and traded, but each token is unique and distinct; they are not interchangeable like ETH and other Ethereum tokens. NFTs can represent ownership of digital or physical assets. (*Major use case for these going forward in the future*.)
DAOs (Decentralized Autonomous Organizations) A company or other organization that operates without hierarchical management.
How to Buy Crypto
Where to buy crypto from? If you’re in the US the most common place retail will buy and sell cryptocurrencies is still on a centralized exchange (CEX), like Coinbase. CEXes are based out of single 3rd parties/middlemen, such as Binance if you’re not in the US.
A CEX gives the user a central place to easily exchange fiat (USD) for crypto all in one place online. The primary objective of all CEXs is to give buyers a simple experience.
Users use them as an option to directly exchange dollars → crypto, crypto → crypto, collect fees, set buying and selling limits. The number one downside is the KYC side and other limitations they have compared to DEXes.
Coinbase is one leading example of a CEXandcurrently the most popular place to buy and sell cryptocurrencies in the US. Even though COIN is the number one centralized exchange here in the US by daily trading volume. Binance still has the highest daily trading volume globally.
A Decentralized Exchange is a type of Dapp that allows you to swap crypto assets with another person on the respected network. Using Uniswap would be ran on the Ethereum network. All ran on a smart contract and an engaged via the web user interface.
This is where you can go to swap other ERC-20 tokens. The Uniswap Protocol is an open-source protocol for providing liquidity and trading ERC-20 tokens on Ethereum.
It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchanges. UNI is the native token on the protocol. To swap tokens, provide liquidity, or vote on governance proposals you go onto the platform at uniswap.org and connect your MetaMask wallet.
MetaMask is a browser extension wallet you use online that directly connects with the protocols like any other wallet and is simple and easy to use.
MetaMask allows you to browse the web in the wallet giving you an easy method to connect with DeFi protocols and marketplaces with the funds stored in your wallet.
“Unlike other wallets, MetaMask injects a web3 instance into a variety of Ethereum blockchains”Gavin Wood
Starting with that will put you in a good position to get involved in crypto. You can see that crypto today is completely different than it was 10 years ago. Just because you missed the first couple bull runs doesn’t mean it’s over though.
There is a lot of opportunity for what lies ahead for anyone looking to get involved. There is opportunity in DeFi growth, NFTs, and more web3 developments. Joining crypto in 2022 is a great opportunity while you have the chance to dive into play to earn games and get in early to new protocols.