Understand and learn about cryptocurrencies from 100 euros

It’s a fact: you can’t learn to swim or ride a bike just by reading a book. Practice is needed to understand how cryptocurrencies work. Try, make mistakes and finally click. It’s a bit the same with cryptocurrencies. Bitcoin, Ether, Solana, Terra, Dogeā€¦ with their names coming out of nowhere, their instability and their sulfur reputation, many still refuse to take a step.

Given the staggering amounts already invested (even if the number of bitcoins under the protocol is limited to 21 million units), cryptocurrencies seem to remain. The main hurdle remains: it all seems too difficult to understand to begin with. It’s not like classic currencies or stocks, where you just have to get close to your bank to invest. But, nevertheless, it has an advantage: it makes us truly immerse ourselves in this universe. And therefore understand the intricacies.

  • Cryptocurrency is a digital currency which does not belong to any state and operates without a trusted third party (without a bank).
  • This is an algorithm who makes money transfers and transactions.
  • This is a blockchain that serves as a large property registryconstantly changing new agreements.

100 euros to understand cryptocurrencies

We are not going to give you financial investment advice in this article. It is even better to believe that the 100 euros we are going to invest here have already been lost. We, as they say, “pay to see.” Therefore, you should not invest this amount if you believe that you have a real need for it in the short or medium term. The goal here is to invest in the long run to understand how cryptocurrencies work and their fluctuations, not to speculate.

1. Select a service provider to purchase cryptocurrency

There are many services for buying cryptocurrency. They are brokers. The broker allows you to sell and buy cryptocurrency. We can cite, for example, Coinbase, Kraken, Quantfury, Binance or even CoinHouse, a French platform. For each of them, all you need to do is create an account and then connect it to the payment system (your credit card, Paypal, etc.). Depending on the platform you choose, you may need to answer a few questions and verify your identity. From there, you can invest the right amount, 100 euros or a little less, because there will be costs.

You can also buy cryptocurrency through your bank (some now allow it) or financial services such as Revolut, N26, etc., or even programs like Lydia.

2. Buy your first coins

The easiest way is to first choose Bitcoin (BTC), which is based on the blockchain of the same name (but limited to this currency only) and / or ETH (ETH), which is based on the Ethereum blockchain and which allows other applications to save. their data on it. It is important to know this information because each transaction is recorded in a blockchain. If you want to change the blockchain, you will need to transfer money from one blockchain to another through an intermediary. Going through an intermediary will cost you some money.

3. Blockchain explains in 30 seconds

Before proceeding, it is necessary to understand the work of this huge database, which contains the history of all exchanges between its users since its inception. With each new element (most often transactions), this event will be added to a huge file, which is a blockchain. And with each new block, the latter contains information that depends on everything that was described earlier.

To sum up, a blockchain is a property register that allows you to do without a trusted third party (such as a bank). Here is an algorithm that will check the information (do I have money), control the transfer, and then save the data in the blockchain. Clear.

4. Make notes of cryptocurrency purchases

Each price can be extremely variable. To know exactly whether you are making a profit or losing time, pay attention to the price of each cryptocurrency on the day of its purchase (for example, 100 euros = 0.0031 bitcoin). Also remember the username and password of the platform used – it will be enough to write in your smartphone.

5. Immerse yourself in Web3 by opening your wallet

So far, it may have seemed like you had already taken a step in Web3, but you didn’t. You are still on the edge. Yes, you have purchased cryptocurrencies, but they are still associated with the trading platform app, as can be the case with any publicly traded stock. To really switch to Web3, you need to create a wallet (portfolio in French).

Wallet is software that allows you to keep cryptocurrency. It is registered on the blockchain (some wallets are compatible with several blockchains, others are not) and therefore completely safe. This is not necessary if you keep your money with a broker, so we advise you to create your wallet (s). Congratulations, you have one foot in Web3!

6. A key of 12 words to NEVER search

There are many wallets. You can mention Metamask, ZenGo, Coinbase Wallet, Electrum, Exodus, Cr’ypto.com, Binance Wallet … You should consider the advantages and disadvantages of each and see if it is compatible with blockchains that interest you. you.

When creating a wallet you are assigned a private key, a series of 12 or 24 words in English. These words, presented in a special order, are the only way to find your account. Your unique password. It can look like this: food-walk-page-table-smile-water change and so on. Without them, your money is lost forever in the meanders of the blockchain. UNDER NO CIRCUMSTANCES SHOULD anyone share their private keys. Anyone with a private key can get all your money back, and there’s nothing you can do about it. If you’re afraid to forget it, you can also invest in a physical wallet (a hardware wallet that looks a bit like a big USB stick). The leader in this market is the French Ledger.

In addition, there is also a public key (somewhat similar to RIB), which you can give to your broker to recover your cryptocurrencies and put them, for example, in your wallet. From here, your money is completely in your hands.

7. Which cryptocurrency to invest in?

Decide for you! The two most popular currencies are bitcoin and ether, so it’s easiest to get started with cryptocurrencies. But there are a large number of cryptocurrencies. It may be interesting to gradually diversify your portfolio and explore other concepts. Indeed, cryptocurrencies are often associated with a particular project.

This is the case of Mana, a cryptocurrency from the metacentre Decentraland, The Doge (or Dogecoin, inspired by a viral meme about a dog shiba). Initially, the currency was created on the principle of a joke, the doge is intended for transactions for small amounts, such as tips. It will soon be available on Twitter to pay small sums (this is the favorite cryptocurrency of Tesla boss Ilona Maska).

8. Explore something else with NFT

Now that you have cryptocurrencies, you can buy NFT (here we explain in detail what NFT is). You can find them on specialized platforms, real digital art galleries, the most famous of which is OpenSea. Once purchased, all you need to do is keep your Non Fungable Token in your wallet.

9. Forget that you have cryptocurrencies!

Once the investment has been made, you may be tempted to keep track of prices as closely as possible on a daily basis, even several times a day. This first decision will undoubtedly cause you some stress, as these currencies are very volatile, including the most famous, such as ether and bitcoin. It is not uncommon for fluctuations to exceed 5% in one day.

Thus, you may get the impression that you will get rich or ruin yourself in a few hours, but very often it is a simple manipulation of speculator prices. Usually in a few days everything is fine. It is best to forget that you have these cryptocurrencies and return to them only from time to time. Important evolution in the long run. And what you now know is enough to invest in cryptocurrencies.