A Beginners Guide to Bitcoin, Blockchains and Cryptocurrency. . in plain English.

1. Introduction: Well, hello and welcome to this course all about Bitcoin, blockchain and cryptocurrency. First of all, don't worry if you know absolutely nothing about this topic or if you're not particularly technical or computer savvy. In fact, you are the very first one this course was designed for. In this course we will take you from a position of knowing nothing about blockchains, Bitcoin, and cryptocurrency. To one of you having an in-depth understanding of how this technology works of the crypto industry in general, how you can participate in it's really exciting new field. We're gonna do all this using plain English with this few technical terms and has little jargon as possible. If you already have some background knowledge about cryptocurrency than the lessons are broken down by individual subjects. So you can easily skip anything you're already familiar with and move on to the lessons are interested. Unless you're already a cryptocurrency guru, there should be something of use to you in this course. Okay, before we continue, let me stress one more thing. My job is to demystify the world of cryptocurrency and help you get familiar with the concepts involved. However, I am not a financial advisor and nothing in this course should be considered financial advice. Okay, so here in this lesson number one, with all this said, let's jump into the next lesson and discuss the underlying technology that powers the world of cryptocurrency. By that, I mean blockchains. What are they? Why are they so powerful? And how can blockchains revolutionized so many of the things we do today. Thank you very much for your time. I'm excited you chose to take this course. And when you're ready, I'll see you in the very next lesson. Thank you very much. 2. 1 2 Blockchains : Well, hello and welcome back to our first lesson all about blockchains. Now, blockchain is one of those buzzwords that gets thrown around a lot, but often goes undefined or gets misunderstood. So let's fix that right now. A blockchain is a very simple thing. A blockchain is nothing more than a computer-based ledger of transactions where information can be added but never edited or deleted. When you send a transaction on the blockchain, it is not sent to the receiver immediately. Instead, it is grouped together with all the other pending transactions and they all execute it at the same time. This group of transactions is called a block. On the Bitcoin network, one block of transactions is executed every ten minutes. Once executed, that block of transactions is added to the ledger in order of the first block to the last block. So the most recent block is added to all the other blocks which forms a chain, hence the name blockchain. The contents of each block are quite simple. You have an account number and then some data. Now for blockchains to be of any use to us, that data needs to represent something in the real-world, such as the amount of Bitcoin you own, the amount of car parts in a shipping container. Or it could even be the text of a document such as a book or a legal or health care document. So you see, once blockchains can be used to store and transfer financial assets such as cryptocurrencies. It can also be used to manage non-financial data as well. As long as there is a need to assign some data to individual accounts or tracking numbers, if you will, and keep a record of it, then blockchains can be used. So blockchains are really nothing more than an asset and information management system. Now, there are significant and important differences between the regular databases that the majority of the world's data is stored on blockchains. Let's discuss the differences first, and then we'll learn about the advantages we gained from those differences in a regular database used by banks and governments to manage assets and information. There are many different types of users. You can have a single user account like you and me, who can only interact with the data that's assigned to our own specific account. Then you can have more powerful users, such as bank employees, who can access multiple accounts to read and edit information. In regular databases, there is usually even a superuser account type. We can access and edit every piece of information that a database contains. This is called a one-to-many relationship. In this case, one superuser account can manage many database accounts when regular database is get hacked and money or information gets stolen. Often it is because the hackers have managed to gain control of these super user accounts. Now in a blockchain, only one person can control your account. Nobody else is able to access your account unless for some reason you give them access. Sadly, this doesn't mean the blockchain based asset can't be stolen. They can. But when this happens, it is always because the account holder has been tricked into revealing their password or they've been deceived into sending their assets to a scammer. It is impossible for a hacker to gain some kind of super user level of control over a blockchain. In the same way as they can irregular database and take control of all the contents of that blockchain. Now, how else are blockchains different? Well, in a normal database, there are a few different ways you can interact with data. You can add data to a database as shown here. But you can also delete information from a database if you wanted to. Also, you can edit existing information in a database. Man, change it. So if a hacker got superuser access to a database of sensitive information, they could create a lot of problems by adding false records or by deleting or changing legitimate records. Or if your bank made a change to their computer programs which contained a bug, then information in the database might be edited or deleted by mistake. These types of issues arise often in complicated systems that use regular style databases. As we discussed earlier, in a blockchain, information can only ever be added. They can never be edited or deleted. Once information is written into a block on a blockchain, it is impossible for it ever to be changed afterwards. And if you're wondering how that's the case, I'll explain in a later lesson. So that's it. That's a blockchain. It's just a different sort of database where the access to information is much more control than a regular database where data is only ever added. So what are the advantages of blockchains over regular databases? Well, number one, as each of your transactions in the blockchain can only ever have been made by you, then your information in the blockchain is always correct. Nobody else has access to make mistakes or do anything elicit unless you give them your password. Number two, in a regular database, there are other users that have permissions over your account, such as bank employees. Therefore, if you try to make a transaction, the bank doesn't like they can stop that transfer from happening. For example, if I were to try to send money to a relative that just happened to live in Iran or Zimbabwe. Both countries which are under international sanctions, then the bank would simply not let me, even if my relative was a perfectly innocent, law-abiding person and really needed the money. I would be prevented from sending my money to my relative because the bank has such a level of control over my bank account. However, in a blockchain, only I control my account. So if I transfer a Bitcoin to you, then nobody can stop that transfer has nobody else has any sort of control over my account of blockchain transaction can simply not be stopped. Now, as only you are, I can control our accounts on a blockchain. It also means that a blockchain transaction is one way. If you send a transfer to the wrong person, then you cannot reverse it or clean it back. In the case of Bitcoin, if I were to send some Bitcoin to you, then once it arrived in your account, remember that you and only you control that account. Therefore, there is no way for any third party or automatic process to send those becomes back to me if I change my mind about that transfer. So let's recap. Blockchains are different from regular databases as only one person has control over one account and information is only ever added, it is never edited or deleted. Blockchain transactions cannot be reversed once you've made them on a blockchain transaction cannot be stopped by anyone. Well, in fact, the only way you could possibly stop a blockchain transaction moving from person a to person B is if you shut down the computer system that the blockchain software was running on before the transaction had finished. And in order to stop people from doing just this and shutting down a blockchain to stop transactions. Blockchains were designed to be decentralized. Now, what is decentralisation? You may ask? Well, we will cover that in the very next lesson. But for now, that's it for this lesson. Now, as always, if anything is a little confusing to you at this point, That's quite alright. That is to be expected. These concepts are really quite straightforward, but they do take a little getting used to it first. If anything is unclear, please go back and re-watch this lesson again. I promise you, things will become clearer. You can always reach out with any questions you might have. Okay, well, that's it for this lesson. Thanks once more for your time and I will see you in the next video. Goodbye. 3. 1 3 Decetralization : Hi and welcome back. In this lesson, I want to explain to you why a blockchain transaction moves directly from me to you and does not cover any sort of middleman and as a result, is unstoppable. Blockchains can do this because they aren't decentralized. Which is yet another buzzword that gets thrown around a lot but often goes undefined or gets misunderstood. So what is a decentralized system? Now, you most likely paid from this course with a credit card. You fill in a form on a website which sent a payment request TO bank, which in turn made a payment to another bank, which in turn made a payment to me. And thank you for that. Each bank operates their own transaction processing system, which process transactions and root money all around the world. The problem with this is that if either of the banks in question were offline at the time, then your payment could not have been completed. Your bank has the ability to block that payment or put other restrictions in place as they may deem appropriate. So if your bank didn't want you to send money to me for any reason? Well, they simply wouldn't let you. This type of setup is called a centralized system, as there is a central controlling authority. A decentralized system does things differently. Instead of there being one central processing system between the sender and the receiver, there are multiple independent processing systems called nodes. The transfer moves between different nodes as it moves from sender to receiver. Which exact nodes are used for the transfer will be different from one transaction to the next. Depending on whatever factors the system considers important that the time, such as data transfer speeds for example. So identical transfers between you and me might be routed via a totally different series of nodes every time. One purpose of a decentralized system is to remove the single point of failure that a centralized system possessive, because if one node stops working, all the others can ensure that transactions continue. The Internet uses a similar decentralized system, send data from one computer to another. This design was based on an early military network called the arpanet. The arpanet was designed to ensure that US military computer systems could continue to communicate even if multiple nodes had been destroyed during war time. So to recap, a decentralized network is made up of multiple independent computer systems called nodes. You can remove a number of nodes from the network and keep the overall network running perfectly fine. But decentralization offers multiple other benefits, as well as single-point of failure protection. Now, each node is an independent computer system, but they all need to run the same computer program to process transactions. In the case of cryptocurrencies, we run a blockchain program on every node. This combination of multiple independent nodes running the same blockchain computer program is what gives cryptocurrencies unique benefits of a regular feared currencies. To illustrate these benefits, Let's look at the background of the very first cryptocurrency bitcoin. Bitcoin was developed by Satoshi Nakamoto. All we know about Satoshi is the name. We don't know if he's actually a real person or if that's an alias for someone, or even if it represents a group of people. People have obviously search for Satoshi before now and they did find a likely candidate by that name. Living in modest life, who strenuously denies any connection with Bitcoin whatsoever. Now, Nakamoto was active in the early days of Bitcoin is development. But stop responding to e-mails after a few years. It has not been heard from since. For the purposes of this course, I will refer to Nakamoto as though nobody really knows for sure. Nakamoto never met others in-person and only ever corresponded with people via internet message boards and emails. He wrote the original Bitcoin blockchain software and released copies of that software to anyone who wanted it. So the Bitcoin could be developed by any computer programmer who wanted to help. This collaborative way of writing computer programs is called Open Sourcing. Today, the coins evolution is controlled by a committee of volunteer developers to set up a non-profit foundation that any computer programmer anywhere in the world could contribute to if they wish. As all bitcoins code is open source and available for anyone to review. And any mistakes or malicious changes to that code are prevented by a rigorous peer review process. So Bitcoin is not accompany the Bitcoin concept is not owned by anyone and it's not controlled by any central controlling authority. And anyone can get involved in Bitcoin without permission from anybody else. When developing Bitcoin, Nakamoto did not actually invent the blockchain concept. That was developed by W Scott so Neta and stood HIPPA. They wanted to create a system where the timestamps of transactions could be immune to any form of change or tampering, which most computer systems at the time could not prevent. Nakamoto built on this unchangeable data idea when he developed Bitcoin, he devised a system whereby people could transfer sums of a new currency he invented called Bitcoin between each other using a blockchain based computer problem. Motor wanted to create a new currency that was outside the control of any bank, government, or any central controlling authority. As discussed, image becoming code open source. Anyone can help develop it. And he designed the system so that anyone who wanted to could start it on Bitcoin node and help process bitcoin transactions. You see URI could download the Bitcoin node software, install it on a computer, and begin processing Bitcoin transactions. We do not need any pre-approval or anyone's permission to do this. We just install the software on a computer or get up to the Internet and press the on switch. In return for us doing this, when we actually process transactions on our node, we get rewarded for that with all of the transaction fees from those transactions and also a payment of newly created bitcoins. So now that we've had this little history lesson, which is important to the details of follow-up. Let's continue to discuss decentralization and learn why it ensures that a Bitcoin transaction is unstoppable. In a nutshell, every node in the Bitcoin system is independently run by an anonymous person who could be located anywhere in the world. As such, no single government could shut down all the nodes from operation. They could try to shut down the nodes operating in their country. But that would be pointless. Is all the other worldwide nodes we just keep on running and be available for you and I to access via the Internet. If a government or anyone wanted to stop my transaction from taking place, they would have to shut down every single Bitcoin node worldwide, which of course they can't. They could try to shut down the ones in their country, assuming they could find them as disgust, it would be pointless as the network would just keep on running. Now, at this time, there are over 15 thousand nodes in operation that we know of. And the reality is there will be many more raw transaction to be considered unstoppable. We only need two of those nodes to be running for that reason and that reason alone. Bitcoin transactions are unstoppable. Nobody can stop me transferring Bitcoin to you. Oh, one more thing about Bitcoins. Like most other cryptocurrencies, are divisible into smaller parts. Just like the dollar is comprised of $0.100, a Bitcoin also sub units and value. However, unlike the dollar, which has 100 subunits, two decimal places, uh, bitcoin has 80 decimals. Therefore, I can send you this sum of Bitcoin shown on the screen here, if I wished, at today's prices, that is about 0.000552 sets, or approximately 5.510 thousandths of $0.01. The smallest subunit of Bitcoin shown here is known as a SAT, which of course is named after Satoshi Nakamoto. So this is the quick high-level overview of how the Bitcoin network runs. In the next lesson, we're going to lift the lid on this network and get more familiar with exactly how the network is able to do what it does. Until then. Thank you very much for your time. As always, if anything in this lesson was unclear to you. And please re-watch the lesson again. And it should make a lot more sense. Once you're ready. I'll see you in the next lesson where we discussed the Bitcoin network. Until then. Thank you very much for your time. 4. 1 4 Mining : Well, hello and welcome back. In this lesson, I want to expand on some of the points we discussed in the last video regarding the Bitcoin network and explain Bitcoin mining miners and something called the consensus mechanism. So back in 2009 after Bitcoin was launched, a worldwide network of Bitcoin nodes sprung up, each run by a different anonymous person or company who had no connection with each other and operate it totally independently. At first, people could run nodes on their own home computers. However, as BitCoin became more popular, it become necessary to use more sophisticated and powerful computer equipment to run a Bitcoin node. Today, if you wanted to mine Bitcoin, you would need an incredibly powerful computer system. In order to do so. Running a Bitcoin node is referred to as Bitcoin mining. And the people that run these nodes are obviously coal miners. As we discussed in the last video, the fact that each Bitcoin node is run by a company or individual could be located anywhere in the world, means that no government in the world can unilaterally shut down the Bitcoin network. China has several times put pressure on Chinese Bitcoin miners to stop operations. And each time the Bitcoin network just kept running as it was designed to do. According to the tracking website, bit nodes.io, there are currently just under 15 thousand Bitcoin nodes in operation as I stand here. And even though these Bitcoin miners are unknown people processing transactions on an audited computer systems. Don't worry, your transfer of Bitcoin is perfectly safe from interference. You see every node in the Bitcoin network routinely and automatically shares information with every other node. Every node multiple times every day will agree on a single approved copy of the Bitcoin blockchain. This way, the entire network always uses the same, identical copy of the blockchain at all times. This process is known as the consensus mechanism. Should a rogue bitcoin miner tamper with any of the transactions that passes through the anode. The net copy of the blockchain will be different from everybody else's. In which case, then node is automatically removed from the network and can process no transactions until such time as they begin using the correct copy of the blockchain again. Now being removed from the network prevents the minor from earning any block rewards. And those are the payments in Bitcoin that a miner receives from processing transactions. So any corrupted transactions a bitcoin miner attempts to process will be rejected by the network. So you can rest assured that any fraudulent attempt to steal or misuse your Bitcoin by a minor will be quickly and automatically prevented. And of course, as minus process transactions for profit, it's always in their best interests to ensure your transactions are processed correctly. The consensus mechanism also protect you from hackers. If a hacker managers to gain access to a single individual Bitcoin miners node and edits the information they find that then the consensus mechanism was spot those changes before the next block of transaction is processed and remove that node from the network. Now, in case you're wondering, for someone to hack the entire Bitcoin network, they would need to physically hack 51% of the nearly 15 thousand nodes in operation worldwide and make identical changes on each of those 15 thousand nodes in the same ten minute time frame. Ten minutes is the time it takes a new block of transactions to be processed. This is called a 51% attack. Whilst being theoretically possible, this action would be so difficult. In reality, it is effectively impossible to do. This is why people say that Bitcoin is an hackable. The design of the Bitcoin blockchain is far more secure than any computer system of any government or bank. Okay, so let's look at Bitcoin mining in a little more detail. Now, in order to process transactions, the Bitcoin network groups all pending Bitcoin transactions together in blocks. At this point, each of the different minors competes to be the first to process this new blog by trying to solve a very complex mathematical puzzle, which we'll go into more detail on in the next lesson. This method of mining is called proof-of-work or POW for short. By solving the mathematical puzzle, the successful minor has proven that then mining hardware system is powerful enough for the Bitcoin networks needs. The more miners there are in the network competing to process blocks, the more difficult to mathematical puzzles become. Alternatively, the fewer miners there are in the network competing to process blocks, and the easier the puzzle is to solve. This variable level of difficulty is known as the hashing difficulty. And as I say this, the hashing difficulty is currently so difficult to make it necessary for you to operate banks and banks of specialized computer equipment in order to mine a block. When Bitcoin first emerged, you could do this on your home computer. But those days are long gone. But minor, the succeeds in processing a new block of transactions is rewarded with the transaction fees from all of those transactions. And in addition, a small amount of bitcoin is newly minted by the Bitcoin system and awarded to that minor, which is how new Bitcoin is created and enters the money supply. These block rewards, as they're called, will continue until 21 million Bitcoins have been created. After that, no new Bitcoin will ever be created. After this point, miners will only be rewarded with the transaction fees of the transactions they process. And there will be no more block rewards. After a new block is mined, it is added to each nodes copy of the blockchain and a new group of pending transactions is compiled from the waiting list of transactions. And the process begins again using a completely new mathematical puzzle that needs to be solved. This happens every ten minutes. Well, that's the overview of Bitcoin mining. You may have read online that this method of mining is very demanding in terms of electricity use and is considered environmentally harmful. And in my opinion, was some of those accusations are a little exaggerated. There is some truth in this. Other cryptocurrencies use other mining methods such as proof-of-stake, which is where you get to process transactions. If you can prove that you own x amount of the cryptocurrency and question. Later in the course, when we get to the lessons on passive income and investing, we will discuss these sticking options in more detail as they offer investors such as you and I are some excellent opportunities to earn passive income, but we'll get to that in good time. Okay? So that's the end of this lesson. As always, if anything is a little confusing to you at this point, That's quite alright. That is to be expected. These concepts are quite straightforward, but there's a lot of them to take it first. If anything is unclear, please go back and re-watch the lesson or reach out to me with any questions you might have. I will see you in the next lesson. And as always, thank you very much for your time. 5. 1 5 Cryptography : Well, hello and welcome back to this lesson on hashing and cryptography. And please don't worry, if this lesson sounds a little technical. We're just going to go very high level overview of the topics at hand. And in reality, the concepts are pretty straightforward. So as you now know, a blockchain is nothing more than a ledger of transaction information. And every bitcoin transaction is simply a transfer of ownership from person a and person B. When you send Bitcoin to someone, in reality, you're not sending anything. As your Bitcoin never leaves the blockchain. Your Bitcoin transaction is simply a message sent from you to the Bitcoin network, asking them to credit some of your Bitcoin from your account to the count of somebody else. That's all a Bitcoin transaction is. It's just a simple transfer of ownership. As we've mentioned several times, all new transactions are grouped together in blocks. And each new block is then linked to the one before it in sequence to form the Bitcoin blockchain. The order of those blocks in the blockchain, and the integrity of the data they contain is enforced by the use of cryptography. Cryptography is the study of secure communications techniques that allow only the sender and the intended recipient of a message to be able to understand that message is contents. Cryptography does this by the use of a technique called hashing. Hashing is a method of taking information and encrypting it into a message that cannot be understood by a human or used by any computer system other than the one it was intended to be used by. The unreadable message that's created is called the hash. Here are some examples of what hashes can look like. A hash of the sentence, Hello, my name is Adam. Is this a hash of the entire first chapter of the classic novel War and Peace is shown here. And if I should edit the final chapter of war and peace and remove only the final period or full stop for us Brits from that final sentence than the hash now changes to this. So as you can see, unless you can decode a hash back into useful information, it is impossible to guess what type of information or how much information the hash represents. In this way, you can send classified information to anyone safe in the knowledge that the information cannot be compromised. Hashing is commonly used online when you choose a password online, perhaps for your email or online banking. Those passwords are almost always hashed before they're saved in the database. So even if a bank employee was to look at your information in the database, they would not be able to understand your password. Oh cool. Is that in Bitcoin mining, every new blocks contents hashed and a resulting string called a nonce is generated. In order to process these transactions and add this block to the blockchain, Bitcoin miners compete to guess the nodes using very powerful computer systems running the Bitcoin mining software. Once a minor correctly guesses the nonce, the block is added to the blockchain. The minor is rewarded in Bitcoin and the process begins again. How difficult this process is will vary depending on how much computer processing power is being used across the entire Bitcoin network. The more processing power there is, then the more complex the nonce is to guess. This difficulty level, as we've discussed before, is called the hashing difficulty. And it's calibrated so that the Bitcoin network will process one new block every ten minutes. Okay, So that's a very high level view of hashing. It is a complex subject, but please don't worry, in order for you to use cryptocurrency, you do not actually need to know about hashing. As you yourself will never need to create any hashed values. But as hashing is a core concept in blockchains, I included a brief introduction to it in this course. If you want to learn more about how the Bitcoin blockchain uses hashing to process transactions and protect data from being edited. Then there is a wealth of more technically detailed information online. Now, let's discuss your bitcoin account, where your Bitcoin is stored. Each member of the Bitcoin network is assigned something called a public key and a private key. And an example public and private key pairing is shown here. Your public key is public information and can safely be shared with anyone. But as the name suggests, your private key should remain a secret, known only to you. Think of your public key as your bank account number and your private key as your online banking password. Anyone who knows your public key can send you Bitcoin, but only the person who knows the private key, I view is able to access those Bitcoin once they arrive in your account on the blockchain, your public key is also commonly referred to as your public address, your wallet address, or more often than not, it's simply called your Bitcoin address. Now, anyone in the world can type your wallet address into a special website called Block Explorer and see both the balance of Bitcoins that is held by this wallet address, as well as every transaction that this address as ever participated in. What people can't see is who owns and controls this address, ie, they can't see your identity. So if anyone wanted to send some Bitcoin to this address, they could do so. They do not need your permission or approval to send Bitcoin to you. All they need to know is your big kind of dress. However, once those Bitcoin arrive in your account, the sender cannot retrieve them or control them in any way ever again. As far as the sender is concerned, that Bitcoins once sent and received by you, are gone for good. And that's because there's no central controlling authority you can complain to that can help you retrieve those funds if you send them to the wrong person. If you want to transfer your Bitcoins to somebody else. And you need to have the corresponding private key that allows you to access and control the public key or the Bitcoin address. So for you to send some Bitcoin to me, you need to send a message to the Bitcoin network that has been digitally signed using the private key that corresponds to your wallet address. And to do that, we need to use a piece of software called a crypto wallet. A crypto wallet is a piece of software or hardware device that stores your private key and allows you to send a digitally signed messages to the Bitcoin network, which allow you to access and control your Bitcoin balance. Now, often people get confused by the use of the word wallet. And they think that their crypto wallet actually contains that BitCoins. This is not the case. Please remember that your Bitcoin balance is only a piece of information on the blockchain. Your Bitcoin never actually leave the blockchain. Your wallet contains your private keys and allows you to send a digitally signed messages to the Bitcoin network in order for you to access and control your Bitcoin balance. Well, I hope that's not confusing, but if it is, the good news is, we're ending this lesson here. If anything in this lesson is unclear to you, please re-watch the lesson and I'm sure it will begin to make more sense. When you're ready. I will see you in the next lesson where we're going to look at crypto wallets in more detail. But until then, as usual, thank you very much for your time. 6. 1 6 Wallets : Hello and welcome back to this lesson where we discuss cryptocurrency wallets. As we discussed in the last lesson, you may have heard people talk about that Bitcoin wallets and reach the understandable conclusion that these wallets contain actual bitcoins. This is not the case. As we mentioned earlier, your Bitcoin balance is only a number saved in a computer system. A Bitcoin wallet actually contains your private keys. These private keys are necessary for you to successfully access and transfer your Bitcoins. When you transfer Bitcoin to somebody else, you send a transaction using your crypto wallet. The wallet software signs the transaction using your private key so that the Bitcoin network knows that this is a legitimate transaction that can only have come from you. Therefore, if you ever lose access to your Bitcoin wallet, let's say you forget the password, Then you have not lost the bitcoins themselves. You've just lost your ability to access them. But you can make a backup of your wallet just in case you do ever forget a password or two. If you're worried that someone who knows your public key, your Bitcoin wallet address, might reverse engineer the correct private key using some nefarious and fiendishly clever technique, then please don't worry about it. When it comes to Bitcoin, public and private key pairs. The level of complexity that was used to create this pair is so high that it is effectively impossible to decode a public key and arrive at the correct corresponding private key. To try to do so would be so expensive in terms of the sheer amount of computer hardware needed and the electricity to run it all. Probably for decades, that such action would be futile. You could spend millions of dollars and spend many decades of your life trying with no guarantee of success. Now, when it comes to crypto wallets, they are most basic function is to store your private key. So you could just write your private key on a piece of paper and hide that somewhere safe. And believe it or not, some people do just that. They write their private keys down on paper or they even in grief, that information into a piece of metal. These paper wallets, as they're known, are favored by people who want to hold their crypto for very long periods of time without ever touching it. So they use a paper wallet, the store their private key. As a piece of paper cannot be accessed by a hacker over the Internet. Securing your Bitcoin in an offline wallet in this way is referred to as cold storage. However, people, while it's a pretty uncommon these days, most crypto wallets are actually software applications that as well as storing your private keys, also allow you to make crypto transactions. And in some cases, you can also buy and sell crypto in some crypto wallet software. The majority of wallets are either software based programs which you download to your computer or mobile phone. Or they can even be dedicated hardware devices, such as this ledger nano device or this treasure device, which store your private key on a chip, on the device itself. So your private key is not stored on your computer. Therefore, if you do not have physical access to the hardware wallet, you cannot access your crypto. Okay, that's a quick introduction to crypto wallets. Later on in the course, we will set up our own wallets and make some transactions for free. But for now, I'm going to end this lesson right here. If any of this is confusing to you, then you know what to do by now, please re-watch the lesson or send me a question. Once you are ready, please join me in the next lesson until then. Thank you very much for your time. 7. 1 7 Final Lesson: Hello and welcome back. In order to help round out your understanding of blockchains, I want to take a break from discussing Bitcoin right now and discuss some of the other uses of blockchains may have in the future so that you really understand the blockchain concept and grasp. But it's about more than just cryptocurrency. As I mentioned earlier, to be of any use to us than the information stored in a blockchain has to represent something in the real-world. Money was the first thing controlled by a blockchain with the invention of bitcoin. But as you now know, your Bitcoin is just data stored on a blockchain. So you can use a blockchain to store any type of data, not just numbers which represent money. If you recall, when we discussed hashing, we said that any data can be hashed. So as an example, here is the D to my home. Well, actually a former home represented as a hash. If I wanted to, I could store this on a blockchain quite easily. And because it's encrypted, the details are completely private. However, there's no point be storing the data my home on a blockchain unless there's a good reason to do so. So let's just pretend for a minute that where you live, property deeds are stored on blockchains. How might that change the way that we buy and sell property today? Well, today, the house buying process requires lawyers or notaries to search property and bank databases to ensure that the house is actually able to be bought and sold. We need architects and surveyors to approve the transaction, and banks to approve mortgages. Usually then a lawyer will write up a contract which exchanges the D to a home to you in exchange for a payment from you or your bank to the seller. If you've ever been through this process, then you know that it's expensive, time-consuming, frustrating, and often very stressful. Let's see how blockchains might be able to help. Imagine at some point in the near future, you're shopping for a new home. But instead of wasting every weekend viewing properties all around town, you use a virtual reality headset to look at images of property from the comfort of your own living room. And this has got nothing to do with blockchains, by the way, but wouldn't that be cool? You virtually view 20 or so properties and then decide on a few to visit in-person before you arrive at a final decision on which one you want to buy. The country where you live is very technologically advanced and has placed every property ownership deed in that country on a blockchain. Therefore, every property owner has direct control of the data, they're home. You don't need notaries, are lawyers to access the records. You do so yourself with your private key. So in our scenario, you find a home you want to buy, and then you and the owner sit down and agree on a price. At which point you pull out your phones and make the exchange there. And then using a blockchain designed purely to enable property transfers to take place that take into account mortgage and architect approvals, tax payment, and all of that bureaucracy. There is no need in theory for lawyers, notaries, and bank managers to be involved. And because it's on a blockchain, the transaction is an hackable. It cannot be changed in any way afterwards. Now, understandably, this might sound like science fiction to you, but I want you to consider that all of the technology to allow this to happen actually exists today and is readily available. The only thing missing are the laws, the regulations, and the processes to actually allow this to happen. And of course, the willingness to put a system like this in place in the first place. Because a system like this would actually remove a lot of work and revenue from an awful lot of people that currently make their living moving property from one person to another. This is one example of how blockchains can disrupt businesses. We know it by removing inconvenient, cumbersome, expensive go-betweens from a transaction. If your job is to help people make transactions, but you don't actually add value to the process. You just helped to people perform some kind of complex administrative process, then be aware of blockchains, they could really disrupt your industry. It is coming. Finally, I'm going to discuss one last concept which can confuse people at first. And that is, why is Bitcoin worth anything at all? Well, the answer to that is pretty simple. Bitcoin-like, any asset is worth money and buy money. I mean, regular FIT bank issued currency like the dollar, because there is a market of other people willing to pay you a particular price for your Bitcoin. In order to buy Bitcoin, you send your dollars or pounds or whatever currency you're used to. A cryptocurrency exchange, which is a website that has an account on the Bitcoin blockchain. Registered on this exchange are many other users who want to sell Bitcoin at different prices. They deposit debit coin at the exchanges account on the blockchain. And they tell the exchange what price to sell their Bitcoin at. You then request the bison Bitcoin. And the exchange was cellulite Bitcoin at the best price available and charge a small fee for doing so. You can then choose to leave your Bitcoin on deposit at the exchange or transferred TO own wallet address on the blockchain. It's considered best practice to always transfer Bitcoin to your own wallet address after you've bought it. When it comes time to sell your Bitcoin, you go back to the exchange and transfer your Bitcoins to the exchange. The exchange then sells your Bitcoin to the first available customer that is prepared to pay the price you asked for it. And then they transfer you the proceeds of the sale to your bank account. This is exactly the same as going up to the change desk at an airport and giving them one currency to exchange for another. The exchange performs, the exchange charges you a fee for doing so. So it is this ready market to pay feared currency for Bitcoin that gives Bitcoin its value. And supply and demand set the price in the same way as they do for any other tradable asset. In a nutshell, bitcoin is worth money because there are people interested in buying and selling it. Well, that's it for this lesson. As always. Thank you very much for your time. When you're ready. I'll see you in the next video. Thank you very much indeed. 8. 1 8 Summary : Well, that's it for section one of the course. Now, I'm sure many of you are impatient to get onto the sexier content later in the course. But these fundamentals that we've covered are really important to help us understand the material we learned in later lessons and we skipped anything, then those future lessons may well have been a little more confusing than they need to be. So to wrap up this section, let's review what we've learned. A blockchain is nothing more than a ledger of ownership information which records new blocks of transactions in order from oldest to newest. In such a way that information can never be edited or deleted. Once it's been added to the blockchain. Your Bitcoin is nothing more than an account balance held on a blockchain. There are no physical Bitcoins. Their adjust the account balances of millions of people assigned to millions of individual Bitcoin addresses. Bitcoin addresses are the public key of a public and private key pair. If I know your Bitcoin public key or Bitcoin wallet address as it's more commonly called, then I can transfer Bitcoin to you without needing to know any other information about you. That transfer is onetime and one way. Once my Bitcoin has been sent to you, I can never retrieve it again. It now belongs to you. Only the person who has the private key, which corresponds to a public key or wallet address, is able to approve a transfer Bitcoin from their address to somebody else's addressed. And they do this using crypto wallet software. Cryptocurrency wallet only stores private keys. It does not store cryptocurrency itself. All Bitcoin transactions are processed on a network of thousands of individual transaction processing systems called nodes, that are run by individuals who, if they successfully processed transactions, are rewarded with Bitcoin for doing so. This is Bitcoin mining. If any one nodes copy of the blockchain is compromised in any way, it is automatically removed from the Bitcoin network. That miner will receive no more rewards and the compromise transactions will not be sent over the Bitcoin network only when the minor changes back to using the correctly approved copy of the blockchain and they begin mining again. This is the consensus mechanism at work. Congratulations. If this makes sense to you, then you already have a more rounded and clear understanding of blockchain and Bitcoin than many people that have been active in the space for years. And you know what I'm going to say now. If anything is unclear to you, please go back and re-watch the specific lessons again. And I promise you it'll make more sense. Or you can send me a question and I'll do my best to get back to your query. That's the end of section one. When you're ready, I'll see you in section two. But for now, thank you very much for your time. 9. 2 1 The Crypto Market 1: Welcome back. Now that we've looked at blockchain and Bitcoin, and you have an understanding of how the basic technology works. Let's look at the overall cryptocurrency market. By the way, as things change in developing the crypto market, I will keep this course updated with new lessons and updates to existing lessons. This is something I do with all my courses and I'll ensure these lessons do not get dated and are kept current. And when I release updates, I'll reach out and let you know. So let's talk a little more about the cryptocurrency market in general. Many people worldwide have now heard about bitcoin, the first and currently the most valuable cryptocurrency in terms of its market capitalization. Market capitalization or market cap for short, is simply a calculation of the number of Bitcoins in existence multiplied by the price per coin, which as of today is around $730 billion, yes, billion with a B. As it happens when I wrote the first draft of these lessons a few weeks ago, Bitcoins market cap was higher at approximately $1 trillion. So Bitcoin has fallen about twenty-seven percent in value in that time. This price volatility is normal with Bitcoin and cryptocurrencies in general. As you get familiar with cryptocurrency, this will become something you get used to. Saying that at this time we are in the first week of the Russian invasion of Ukraine. So world events are having a strong downward impact on the market currently, in the overall cryptocurrency market, which includes Bitcoin and each of the thousands of other cryptocurrencies that exists today. The total combined market cap of everything is somewhere around $1.5 trillion. Which means a Bitcoin on its own represents about half of all the money currently invested in held in cryptocurrency, which is not bad for 10-year-old magic internet money, is it? Oh, and as an aside, as I continue with these lessons, I will use the abbreviation crypto in place of the word cryptocurrency from time to time, that should save us a little time. So most because the big player in the market, who are the other cryptocurrencies of note? At this time, the influential website coin market cap tracks just under 8 thousand different cryptocurrencies. There are actually many more crypto is in existence that are not tracked by coin market cap. We can only guess at the total number of crypto is in existence today. The top 20 crypto is ranked by coin market cap makeup, approximately 85% of the non Bitcoin market cap worldwide. Therefore, Bitcoin and the other 20 crypto has combined make up over 90% of the total crypto market. In this course, we will generally discussed just the most popular cryptocurrencies in the market today. Now, before we look at anyone cryptocurrency in detail, Let's discuss the different types of crypto. As not everything is a copy of Bitcoin. And there are a few different genres of cryptocurrency that have evolved over the last few years. Each has their own use. Well, some of them do some kinds of no actual use at all, but we will get to that later. The main kind, as you know, is Bitcoin or BTC, as it is abbreviated. Btc is Bitcoin's three-letter trading symbol. Originally, as you know, Bitcoin was intended as a payment mechanism outside the control of governments and central banks. However, bitcoin owners now tend to use Bitcoin as a speculative investment and a store of wealth, which is why you often hear bitcoin being described as digital gold. Bitcoin transactions are generally quite slow. It can take 30 minutes or more to send Bitcoin from one person to another. Whilst a new Bitcoin block of transactions is processed every ten minutes. That does not mean that every transaction is processed that quickly. In general, it takes 30 minutes or more for your Bitcoin transaction to complete. There are some developments being worked on currently to increase this transaction speed, but they have yet to gain mainstream adoption. If Bitcoin transaction speeds ever reached the speed of credit card transactions in Bitcoin may finally become the payment method. It was designed to be. Until then, people like you and me mostly use Bitcoin as an investment asset. As you also know, bitcoin has no controlling company behind it. There is no CEO of Bitcoin and nowhere is there a registered company that has any rights or control over Bitcoin? This is the same for many other crypto most, but not all of them. Some other cryptocurrencies are designed and operated by registered for profit companies. So there is a mix of commercial crypto companies and collectively run permissionless in the space today. And just to refresh your memory, permissionless means that anyone can get involved with that cryptocurrency. You do not need permission to do so. So let's look at some of the other popular cryptocurrencies. Ethereum or F ETH, it's three-letter trading symbol, is the second largest cryptocurrency in terms of market cap was one of the first crypto has to be developed after Bitcoin. It'd be precise. Ether is the name of the cryptocurrency and a serum is the name of the network. However, you will often see the word theorem used synonymously with ether to refer to the actual currency. Like Bitcoin. Uh, theorem is run by a network of independent node operators called miners, who process transactions for financial reward using the same proof of work mining method that bitcoin uses. There are two main differences between a theorem and Bitcoin. The first difference is the Ethereum Virtual Machine or EVM. When you set up an Ethereum node and begin mining. Not only are you processing transactions between users, but that node and every other node also hosts a software engine which can run software programs. These programs are known as smart contracts, and they can automate different tasks that use the ether cryptocurrency. For example, a simple smart contract or trainee new developers usually learn, is one to handle the escrow of ether between two people. Person a sense ether to the smart contracts wallet address. And that ether is automatically released to person B when a specific pre-agreed condition is met. Remember, we can store any kind of data in a blockchain. So smart contracts are simply computer programs which is stored in an Ethereum wallet address on the Ethereum blockchain. Once somebody sends ether to that wallet address, the EVM, the if theorem virtual machine then runs that smart contract and that contract processes the ether. However it was designed to do so. The development of the smart contract has allowed very sophisticated applications to be developed and run on the Ethereum network. The current explosion of cryptocurrency financial products, which we will cover later in this course, are a direct result of the invention of smart contracts. Now, a theorem like Bitcoin is a public blockchain. That means that every ether transaction is a matter of public record and can be viewed online at a block explorer website. If you know either the wallet dress or the transaction number of the transaction in question. You can enter that into the block explorer and pull up all the details of that transaction and every other transaction that those addresses have ever made. Also like Bitcoin, Ethereum transactions are irreversible because once something is written into a blockchain, they can never be altered. So be careful to send your ether to the correct address. Being unable to change information in a blockchain is referred to as immutability. And this also applies to smart contracts. Once you publish a smart contract to the theorem blockchain, it is effectively written in stone. It can never be altered, amended, or changed. The code you use to write the smart contract is also now public information. So if you've written an amazing and groundbreaking smart contract, then anyone who wants to and copy it and amended for their own purposes. If you write a smart contract that contains a bug or some of the floor that can be exploited, than there is no way to edit your contract to change it. With regular computer programs, software bugs can be quickly fixed and new versions of the software released to users. The smart contracts, this is not the case. Sadly, there are a number of bad actors in the cryptocurrency space that review smart contracts published to the blockchain looking for weaknesses that they can exploit for financial gain. This risk has its own name. We refer to this as smart contract risk. And this is something we will be discussing later when we discuss crypto investing. For the record, Bitcoin also offers smart contracts, but compared to a theorem, those contracts have very limited in what they can do. So once Bitcoin was designed to be a digital currency, theorem was designed as a decentralized platform for building software applications, which also happens to have its own digital currency. Pretty clever, isn't it? The second difference between the Ethereum and Bitcoin networks is a creation of the cryptocurrency token. And for our purposes in this course, we will use this definition of crypto coins and crypto tokens. Cryptocurrency coins like Bitcoin and Ethereum run on their own dedicated networks. Only bitcoin can be sent on the Bitcoin network. And remember, network is just a collection of nodes where each node runs the same blockchain software. So you cannot send ether via the Bitcoin network, and you can not send Bitcoin via the theorem network. However, this does not mean that you can only send ether on the Ethereum network. When a theorem was launched, its designers created something called the crypto token. Uh, Crypto token is a unique cryptocurrency in its own right, but it is designed to be compatible with a different network. In this case, the Ethereum network, you can create a totally new cryptocurrency. But instead of you needing to recruit minors to form a network of nodes to process your new cryptocurrencies transactions. You can just use the Ethereum network instead. This is another of those concepts that can take a little time to grasp. Think of it like this. The Bitcoin network has thousands of minus which process transactions for one crypto coin, bitcoin. The Ethereum network has thousands of minors which process transactions for one crypto coin, which is ether. But they also process transactions for thousands of different crypto tokens as well. These tokens which live on the Ethereum network are called ERC-20 tokens. So not only can you use the theorem network to send ether, but you can also send any ERC-20 tokens on the Ethereum network as well. A theorem by design allows anyone to create their own crypto tokens and then use the theorem network to send those new tokens to anyone who might want to buy them. So you are, I could quickly and very easily create our very own cryptocurrency, which would have its own name, its own price, and its own ticker symbol. But we would not need to create our own blockchain software to run it all, recruit our own network of minus. At this time, it's thought that there are over 450 thousand ERC-20 tokens in existence. So you can see that the explosion in the number of cryptocurrencies in existence today as a large part to do with the development of the cryptocurrency token concept. So to quickly recap, a cryptocurrency coin is a coin that uses its own dedicated blockchain. Bitcoin and Ethereum are cryptocurrency coins. Cryptocurrency token is a kind that does not use its own dedicated blockchain. It uses another coins blockchain. Okay, well, let's end this lesson here. In the next lesson, we will continue to look at the different genres of cryptocurrencies which exist today. As always, please re-watch this lesson if anything is unclear. And when you're ready, I'll see you in the next video. As always. Thank you very much for your time. Bye-bye. 10. 2 5 Networks : Hello and welcome back. Let's finish this section by discussing a little more information about cryptocurrency networks. As we discussed earlier. And that work is just the decentralized group of computer systems called nodes, which run the blockchain software, which enables transactions to go back-and-forth. And in the case of a theorem, then network also run smart contracts. We now know that crypto coins run on their own networks, and crypto tokens run on the networks of other crypto coins, such as the way ERC-20 tokens run on the Ethereum network. And won't surprise you to know that there are many more crypto networks in existence than just Bitcoin, Ethereum and their various folks. I actually don't know how many crypto networks currently exist. It's probably in the hundreds. I personally access about ten different networks in order to manage different crypto assets that I own. Multiple networks exist as they were developed for different reasons. Some will have been developed aimed at traditional finance markets, which is why the cryptocurrency ripple was created. Others will have been developed for privacy reasons like my narrow and still others will have been designed to enable faster transaction speeds, lower transaction costs, or any number of other factors. So it is important you have a grasp of how these different networks interact with each other and how we can safely move assets from one network to another. Because take it from me. At some point, you're going to want to do just that. You see when you send cryptocurrency from your wallet address to somebody else, both you and the recipient must be on the same network. If you mistakenly try to send cryptocurrency to an address that is not on the same network, then you may lose your critters forever. In other words, if I tried to send you some Bitcoins, but by mistake, I sent it to your ethereum wallet address. Then in theory, buy bitcoin might be lost forever. Usually I say in theory, because that's not an actual issue, at least not in the case of Bitcoin isn't as most crypto wallet software would not allow you to send Bitcoin and Ethereum address. As the format of those addresses are very different. If I tried to do that, your wallet software would not recognize the destination address is valid and it would give you an error message stopping you from making such a mistake as is shown in the image on the screen. Sadly, this is not always the case, and it can be possible to send coins and tokens to a wallet address on the wrong network. Where are these mistakes occur? Is with a theory and monitor dresses as the Ethereum wallet address format is widely used by other cryptocurrency networks other than just the theorem network. For example, imagine you want to send a 100 USD c tokens to a friend. And your USB-C tokens are on the Ethereum network. However, unknown to you, your friend is using a wallet on the avalanche network and not on your theorem network. And she has given you her avalanche network wallet address because for some reason she thinks you're also using the avalanche network. Now as both the avalanche and a theorem networks use the same wallet address format, there is no error message that will be shown to you when you send your tokens from your wallet. However, the tokens you send will never arrive on your friend's wallet on the avalanche network. So what happens now? Well, the good news is that when you create a wallet address on the Ethereum network, that address is your unique address on every network that uses that wallet address format. Let me repeat this as it's an important concept to understand. When you create or are issued with a wallet address on the Ethereum network, that address is your unique address on every network that uses that wallet address format. If you recall, an Ethereum wallet address is just a public key that you can access with the corresponding private key. That key pairing is unique to you and you alone, regardless of what network that key pairing is used on. So in our example, the 100 USD c tokens that you sent to your friend did not arrive at her address on the avalanche network because you didn't send them on the avalanche network, you sent them on the Ethereum network. So instead, those tokens are waiting for her inequality dress on the Ethereum network. All your friend needs to do is connect her wallet software to the theorem network. And the tokens will be waiting there for her to deal with as she wishes. This is the case, even if she has never used the theorem network before, those tokens will still be available for her to access on your theorem network. A. She and she alone has the private key necessary to control the address, produce and those coins too easy, right? Please don't worry if this concept is confusing at the moment. If it is, please re-watch this part of the lesson a few times or do some independent research until it makes sense to you. I promise you, we will revisit this concept several times in this course. The concept of transactions being sent between networks becomes more clear and we'll even do a field sample transactions ourselves. Now however, in this scenario, if you mistakenly sent your 100 USD c tokens to a smart contract as opposed to another person. Sadly, you may have lost those tokens for good unless you can find the developer of that smart contract and get them to connect to the other network using their private key. And you're not gonna get you tokens back. Don't worry, if this concept is a little fuzzy. As I say, we will deal with this in more depth in the next chapter when we send our first transaction. And it will be something we return to several times over the life of this course. So that this concept of multiple networks becomes something that you understand completely. So what about converting your crypto coins and tokens into other types of crypto coins and tokens. In your crypto journey, there will come a time when you have assets on one network such as Bitcoin, and you will want to move some of those assets onto another network. You will either want to convert one crypto coin for a different type. For example, convert Bitcoin into either or in the case of stable coins, you may want to move your stable coins unchanged onto another network. For example, you might have $500 in USD c tokens on their theorem network. And you want to use them on the avalanche network where you SDC tokens are also used. There are two main ways of accomplishing this transfer of coins from one network to another. You can use a crypto exchange. You can use a bridge. Let's discuss exchanges. Often. When I wished to move a crypto asset from one network to another, I will send it to a crypto exchange to do so. And we will cover how to use exchanges in the section on buying and selling cryptocurrency. For example, if I wish to move some Bitcoin into a theorem, I can send my Bitcoin to an exchange where I traded directly for a theorem, exchanges trade asset pairs. So you can convert one asset directly into another and then withdraw your new asset. So if I want to swap BTC for f, I will log onto an exchange website such as coinbase or BitStamp. I will deposit my BTC into my Exchange account by the Bitcoin network. I will sell my Bitcoin to somebody else and they will pay me in ether. I then withdraw that ether to my wallet address on the Ethereum network. Think of this as foreign exchange in a bank. I deposit dollars into my dollar bank account, exchange them for euros, and then send those euros to my Euro bank account. And again, don't worry if this doesn't make complete sense to you right now, in a later lesson, we will look in depth at how to buy and sell cryptocurrencies and just introducing this concept now, so we can use it to demonstrate one method of moving your crypto assets between networks. Now let's look at bridges and something called wrapped coins. You can also send your crypto is from one network to another using a web-based application called a bridge. Think of a bridge as foreign exchange for crypto. If you've got $500 in USB-C on the Ethereum network and you wanted to send a $500 to the Finance Network to spend it there. You can use a bridge between the two networks. To do so. With a bridge, you select the cryptocurrency, you currently own the network, those assets are currently on. And then you select the network you want to send your assets to the bridge and takes those assets and moves them to your wallet address on the destination network. Sounds simple, doesn't it? Well, actually the reality is a little more complex than that. You see your tokens on the original network aren't really moved to the destination network. The old tokens are disabled in one of several ways. And new tokens are created on the new network. But it's easier for you to think of it as moving them from network a, network B. So the concept of bridging is simple. Sadly, the reality can be very confusing and problematic. You see, it is not the case that every network can support all the coins and tokens from other networks. In fact, a network must be specifically designed to support the coins and tokens from another network. And there is no common standard across the cryptocurrency industry. So if you wanted to send a crypto token from network, a network be using a bridge, you'd better make sure that those networks are compatible with each other. Because not all bridges will display error messages to stop you from making a mistake. So please do not start sending your crypto was on wild rides across different bridges. Unless you're certain that the networks involved are compatible with each other, or you're going to lose those coins forever. Many crypto users, unfortunately, including myself, have lost assets in the bridging process by sending an asset to a network that does not actually support it. Bridging carries additional issues and risks other than just use error. It is very easy for scammers to set up websites and call them bridges. And they just wait for people to send their cryptocurrency to them. So it is very important when using bridges that you only use credible, well established services. Also, region can be slow and it can take hours or sometimes days for the process to complete. And fees can be very high when you bridge crypto is from one network to another. Particularly with a theorem transactions. We will return to bridges later in the course and provide some demonstrations of the concept in action. Personally, when I wanted to move crypto from one network to another, I prefer to use an exchange. Finally, I want to discuss wrapped coins. So as you know, the Bitcoin network and the theorem network are not compatible. You can't send Bitcoin from your Bitcoin wallet to their theorem network or vice versa. Did you try, as we've just discussed, your wallet software will stop you from doing so. Because cryptocurrency developers are clever little boys and girls, there is actually a way that you can use Bitcoin on their theorem network. And these are called wrapped coins. So you could swap bitcoin from the Bitcoin network for erupt Bitcoin on the Ethereum network, a rap token is merely a token that lives on one particular network, possesses the same monetary value as a token from a different network. In our case, the rapt Bitcoin that we own on the Ethereum network will rise and fall in price identically to a Bitcoin on the Bitcoin network. But it's a wrapped coin on your theorem network. So we can store it and send that W BTC, the rapt Bitcoin ticker symbol. Using our theorem, wallet. Wrapping just helps us easily move coins and tokens from one network to another. And allows us to use those tokens with applications that live on different networks. To make this concept more clear. In later lessons, we'll do some practical examples using wrapped coins. Well, congratulations, to be honest, I think you've completed the most difficult two sections of this course. The introductory concepts of cryptocurrency are, in my opinion, the most difficult part of the learning curve. I hope I've explained these concepts clearly. If not, please reach out to me on the Discord group that comes with this course. And I will do my best to answer the questions. If everything you've learned so far is confusing. If it seems like you're never gonna get the hang of this learning curve, please don't be discouraged. All of these concepts are very straightforward, but I appreciate it's a lot for you to take in at first. As I've said so many times before, if something is unclear, go back and re-watch the lesson. If not, please contact me directly and I will do my best to ensure that you understand these concepts. I think you should take a well-deserved break right now. As always, thank you for your time and when you're ready, I will see you in the very next section. 11. 2 2 Stablecoins : Hello and welcome back. In this lesson, we will continue to look at the different types of crypto coins and tokens on the market today. As not everything is a copy of Bitcoin and Ethereum. Let's learn some more widely used terminology. And alt coin is a cryptocurrency that isn't Bitcoin. So theorem is classed as an Altcoin. However, despite the fact that there are tens of thousands of non Bitcoin crypto is in existence. They're not all generally considered Altcoins. Investors usually only consider serious, well-established non Bitcoin and Cryptocurrencies to be Altcoins. What about the other crypto? Is the less well-established, less serious cryptocurrencies. Well, those coins get referred to as **** coins. I kid you not. So we have Bitcoin then alt coins, which are credible non Bitcoin and cryptocurrencies. And the rest I should coins. Well, that's the naming convention taken care of. But what about the utility? These coins? What are they useful? Well, you have different genres of cryptocurrency that are grouped according to their utility, how they are used. So let's look at those different genres. First, I want to discuss stable coins. As you know, Bitcoin fluctuate in price. Esa on your theorem network also fluctuate and price. Stable coins, however, do not. Stable coins or cryptocurrencies that are always worth the same price. These crypto is do not fluctuate in price based on supply and demand like Bitcoin does. And they always remain at or very close to the value of a real-world feared currency, such as the US dollar or the euro. Some of the popular stable coins today, our tether, us d t, or USD coin US DC, which was developed by Coinbase, one of the biggest companies in cryptocurrency today. And DAI, DAI. Stable coins evolved to enable crypto users to move US dollar denominated payments across cryptocurrency networks. So how do we use stable coins? How are they used? Well, they are used just for currency, but on a blockchain, stable kinds of commonly used by crypto traders that buy and sell cryptocurrencies routinely. When traders sell crypto, perhaps they hope to rebuy it again at a lower price. And they were Selye coined for a stable coin. I hold the proceeds of that sale in stable coins until they wish to make another purchase. This allows them to store money in cryptocurrency without being exposed to market volatility, and without needing to use slow and expensive bank transfers to move funds between their various trading and cats. Because a stable coin transaction can generally be completed in minutes, was a bank transfer can take days. So if you had a $1000 in Bitcoin, but you want it to keep in cryptocurrency and hold for a period of time. But you did not want to risk that money losing value, then you could convert that Bitcoin into stable coins and it will always be worth $1 thousand. This lack of volatility also make stable coins very useful for making payments. For example, if I wanted to send $500 to the freelance editor who works with me to develop these lessons. I could send $500 in stable coins to my editor as a form of payment, which as it happens, is exactly what I do. Now of course, I could also send a $500 worth of Bitcoin or Ether. But by the time my Bitcoin transfer was received by my editor, the price might have dropped quite a bit, and that payment may be less than the $500 she was expecting. So by using stable coins, we avoid price volatility. Of course, I could just send $500 from my bank account as well. But crypto is a generally just faster and easier to use as you will soon see. Now, one important point to note with stable coins is that some of them are backed or pegged, as it's called, at a one-to-one ratio using actual fit US dollars. What that means is for every $1 in stable coins which exists, there is a fear to dollar sat in a bank account somewhere to maintain that peg. So just as many feared currencies used to be backed by gold. Some stable coins are backed by fiat currency. Now, some other stable coins are backed by a variety of assets, such as US dollar and a basket of other cryptocurrencies. Investors that you stable coins often refer to the risk of a stable coin breaking peg and dropping in value, which if it ever did happen, could wipe billions of cryptocurrency investment values. Tether us DT is a stablecoin that is the subject of much speculation regarding its backing. The company which runs tether, has consistently refused to release any audits of the assets which underwrite the value of their stablecoin. So once you SDT is a very popular stable coin for making transactions, many in the crypto community distrust tether to the point where they do not hold any sums of money into other for any long periods of time. Just in case it ever does break It's peg and drop in value. Now, I personally consider tether perfectly okay to use for onetime transactions. But if I ever want to hold money in a stable coin for any length of time, then you SDT is not my choice. I personally prefer to use USB-C will die to hold in my portfolio for any length of time. Now, as stable coins are pegged to real-world feared currencies, then inflation is a consideration. Feared currencies are worth a little less every year due to the effects of inflation. And this of course, also applies to stable coins. So if you plan to hold money in stable coins for any length of time, then there are actually some investment options we will discuss later in this course, which can earn you a decent low-risk passive return for those stable coins, which can help offset any loss of value for inflation. But we'll deal with that later in the section on investing. Well, that's stable coins. Now let's discuss privacy coins. But before I discuss privacy coins, we need to have a discussion about KYC. Know your customer. People often accused cryptocurrency of being used predominantly for illegal purposes. And indeed, several years ago there was a website on the dark web called the Silk Road. Well, you could purchase illegal drugs, weapons, or other items in exchange for Bitcoin. This accusation of bitcoin being a haven for anonymous illegal purchases stems from a fundamental misunderstanding about cryptocurrencies. In general, people think that the transactions between crypto users or anonymous. And in fairness to those people, Bitcoins use was more anonymous in its early days than it is today. However, as you know, every Bitcoin and Ether transaction is actually public information. If you know the wallet address being used by a person, then you can see that person's cryptocurrency balanced and all of that person's crypto transactions via a block explorer. Which you can't see on a block explorer, is the identity of the person who controls the wallet address. By the way, two of the most popular block explorers today are blockchain.com for Bitcoin and Ether scan for a theorem and ERC-20 tokens. So if you know that a wallet address belongs to me and you have the ability to audit all of my past cryptocurrency transactions. Therefore, crypto transactions themselves are not anonymous. Now, in the early days of cryptocurrency, it was almost impossible to link a wallet address to its owners identity, which is why Bitcoin was and is still wrongly considered to be anonymous. This is increasingly no longer the case as governments worldwide are busy changing the state of affairs, which has led to the massive implementation of KYC checks in the crypto space. Kyc stands for know your customer. And when opening a new account to purchase or trade cryptocurrency, it is common for you to be asked to provide a copy of ID, such as a passport or a driver's license, and a recent utility bill to verify your home address. Also, if you deposit a large sum of money into a trading account, then you may need to also provide additional information in order to prove that you came by that money legally. Now, of course, KYC is not just prevalent in the cryptocurrency space. Kyc processes are widely used in the finance industry and are also necessary if you buy anything of value for cash. So if you tried to use cash for a large purchase, such as buying a home, inexpensive car, jewelry, or exchanging large amounts of foreign currency. The seller in most countries is legally obliged to ask you for ID and to report that transaction to the relevant government department. Now strict KYC measures came into place internationally over the last two decades as governments tried to stem the movement of billions of dollars of illegal drug money into the legitimate financial system. When you initially convert feared currency into cryptocurrency at a cryptocurrency exchange. This is called the on-ramp, and it is at this point, but your identity will be established. So if ever necessary, all of your crypto transactions from that point onwards can be audited. When you convert cryptocurrencies back into feared currency. This is referred to as the off ramp. And if you're converting a large sum of crypto interfered currency, you can expect to have to prove that you came by those crypto was illegally. Now, cryptocurrency uses in general have a low opinion of companies which asked them for KYC details. An online you will often see people discuss privacy concerns and make comments that the government, whichever government it happens to be, have no right to that information. Sadly, this is not the case. Yes, of course you have a right to privacy, but unfortunately, that does not extend to the relevant authorities whom you pay your taxes too. And as such, I do not recommend that you buy cryptocurrency in order to keep money hidden, particularly from the tax man. The ability to keep crypto based funds confidential is being reduced all the time by increased legislation from governments around the world. As blockchain transactions are never deleted. Then historic transactions that two-plus years ago. When people thought they were safe and anonymous at the time, and now starting to come back and create issues for them as their identities eventually become linked to that historic activity effect. A few weeks before I recorded this, a very strange story had hit the news concerning a married couple who had been arrested in New York and charged with laundering $3.5 billion worth of Bitcoin. The Bitcoin in question was stolen or hacked from a popular Asian Cryptocurrency exchange back in 2016. Back then, the hole was worth some $700 million. Still a lot of money by anyone standard today was worth over four billion dollars. And three point five billion of that was recovered by US authorities. We've been tracking the SV accused coupled by their publicly available blockchain transactions as they attempted to launder that Bitcoin into cash over the years. So due to ever-increasing KYC checks in the industry, was this coupled with Bitcoin billionaires, it was incredibly difficult for them to spend any significant some of the Bitcoin they'd hidden away without giving away their identities. In the end, they were reduced to buying gift cards at Walmart, the retail store, and buying electronics, which I understand they would then resell for cash. So just like cash, you're going to have to explain yourself. You start to move large sums of cryptocurrency around the world. As an aside, if you're a fan of rap music, then go to YouTube and look up the music videos by the wife of the accused couple, who goes by the stage name rattle can. And once you watch those truly awful videos, please keep in mind that this person is accused of laundering $3.5 billion. Life is truly stranger than fiction sometimes. Anyway, this increasing KYC pressure to identify cryptocurrency users has led to the development of the privacy coin. Privacy coins, as the name implies, evolved to enable users to send cryptocurrency transactions from a to B without those transactions being publicly auditable information. The most popular privacy coin today in terms of market cap is called Monera, which has the trading symbol X NMR. And Monera has a current market cap of around three to $3.5 billion. My narrow is a crypto coin, not a token. So much narrow uses its own network of nodes and minus, it does not use the network of another kind in the way that ERC-20 tokens use the theorem network. Now, if you send money to somebody than unless you tell them who sent it, they cannot tell that that money came from you. If someone knows your mineral wallet address, they cannot see how many payments have been sent to that address or who sent you those payments. Now, the Financial Action Task Force is an international multi governmental anti-money laundering watchdog, which quite a statement. And they have demonized privacy coins over the past several years for very obvious reasons. This pressure has led to many instances of crypto exchanges. The listing privacy coins such as much narrow and refusing to offer them for sale to customers. And frankly, this is only to be expected if your cryptocurrency business model is designed to allow people to participate in truly anonymous financial transactions. Then you're going to have a hard time getting reputable financial institutions deal with you. Now, if you choose to use privacy coins and converting those coins back into feared currency at some point could well be increasingly difficult for you. So yes, there are a lot of people using more narrow today for widespread anonymous financial transactions. But then the future those transactions that they consider to be anonymous may come back to haunt them if their identities are ever linked to them. Even years from now. Ask Russell current how she feels about her identity being tied to old cryptocurrency transactions that she wants considered to be anonymous. If you use privacy coins to evade taxes, then this will always be a possibility for you to. Personally speaking, I would suggest that you avoid using more narrow and other privacy coins even for perfectly legitimate transactions. Because when it comes time for you to declare your taxes, the ownership of any such coins, maybe a red flag that leads to more and not less scrutiny from the authorities. Even if you always use privacy coins in a legal and law abiding manner, it may be difficult for you to prove that and justify why you use cryptocurrencies designed to be anonymous for legitimate purposes. Now, many in the crypto community would strongly disagree with that advice and they would quote their fundamental right to privacy. And I have more than a little sympathy with that argument. But if you find yourself being audited by the tax man because you've used privacy coins even for perfectly legitimate reasons, then you have only yourself to blame saying that it is, of course, your money. And you're free to do as you please. Now, let's end this discussion about privacy coins by quickly discussing privacy networks, which unlike privacy coins, have many potential legitimate users. Privacy networks are purpose-built blockchains designed to allow transactions whose details will be hidden from anyone and authorized to view them. The transactions aren't hidden from everyone. They are hidden from anyone and authorized. Which is an important fundamental difference. As we've mentioned several times earlier, a blockchain can store any type of data. So what other types of data? Because we store and transfer on a blockchain that might have a legitimate need for privacy. Well, what about your personal details, your name, email address, age, medical history, phone records, credit card purchases, and so on. Companies such as Google, Amazon, and Facebook billions every year from using that data, which you provide them for free. Often without realizing you're doing so. And they sell that data to other people. If that data was tokenized, I saved on a blockchain. You could control who can access that information, what they could do with it, and who they could redistribute that data to. Now again, this is a concept that can be difficult to grasp at first, but in the same way as only you can transfer some of your Bitcoin balance to another blockchain user. If your health records were saved on a blockchain, only you could send that information to somebody else. Currently, if your health care records are saved on an insurance company database, then you have no way to control who can access your information. Widespread use of blockchain based privacy networks is admittedly many years away if it happens at all. However, some data, such as health care records, are currently being tokenized and saved on blockchains in some healthcare systems worldwide, access to these records is only accessible with your permission or the permission of someone else you delegate, such as your doctor. If someone does request some or all of your information, you can approve or reject that transaction. And you can also limit that person's ability to reuse your information. All of this is controlled by the blockchain. Furthermore, this data can be compartmentalized so that you can give one person access to only some of the data without them needing to see everything. For example, if you go to a chiropractor for a slipped disc, he or she does not need to know that. You also see a counselor or a psychiatrist. Previously, networks or purpose design blockchains that allows developers to build applications on top of them that are designed for data secrecy. So I am going to end this lesson here. We've discussed stable coins, privacy coins and privacy networks. And in the next lesson we will continue our discussion about the different genres of cryptocurrency by discussing the hugely popular and FFTs. But as usual, if anything is unclear, please re-watch the lesson or reach out to me and get in touch with your questions. And I will get back to you as quickly as I can. I'll see you in the next lesson. But until then, thank you very much for your time. Bye-bye. 12. 2 3 NFTs : Hello and welcome back. Let's continue this discussion about the different genres of cryptocurrency coins. Another type of cryptocurrency coin and getting a lot of attention today. Our LFTs and f t stands for non-fungible token. And fungible is a needlessly uncommon word to say interchangeable. So what does that mean? Well, an NFT is a token of very limited supply. Often just a single individual token that can only be created once. An NFT token is therefore unique, or at the very least a part of a very limited set. Let's compare that to Bitcoin. As you recall, a bitcoin is made up of its subunits called sat. Just like there are $0.100 in a dollar, there are 100 billion sat in a Bitcoin. Now each of those sets is identical to every other sat, in the same way as every penny in your bank account is identical to every other penny in your bank account. But LFTs are quite different from one another. And FTEs are limited in number. They are indivisible and they are unique. Well, that's all well and good. But what's the point? What can we use NFV is for now the current craze is to use entities for digital art. I can create an image of some description. I can convert that artwork into an NFT token, which is called minting it. And then if I wanted to, I guess I could sell it online. The NFT image then lives this data on a blockchain assigned to a wallet address. Remember, this is all Bitcoin or Ether is just data on a blockchain assigned to a wallet address. Now, after this has been minted, the NFT cannot be edited or changed in any way. The NFT is technically unique. Now, what do I mean by technically unique? And this is another concept that can be a little mind bending at first. Think of the NFT as a unique one-of-a-kind container that you can fill up with data onetime, onetime only. If you feel ten and FTEs with identical data, which you can do. The blockchains still considers the NFT to be unique, even if the data it contains is not. So if we've minted the same piece of art ten times as ten and FTEs, then each of those NFT is, is technically one of a kind. As far as the blockchain is concerned. The blockchain see ten totally individual tokens. As far as a human is concerned. Well, we just see ten identical pieces of art. This is one of the two widely held misconceptions about LFTs that a piece of digital art minted as an NFT is unique? No, it isn't. Anyone. And I mean, anyone could copy that piece of art and meant it as a new NFT without the owners or the original artist's permission. And sadly people do just that. The second wildly held misconception about LFTs is that they track ownership. That's possession of an NFT also implies legal ownership of that NFT. And let's keep using art as an example. So you will often hear people tell you that if you buy some NFT based digital art, that you own, that artwork and your possession of the NFT is your proof of ownership. This is also not the case. Ownership is a legal concept and possession is not the same thing legally as ownership. As an example, the state of California defines ownership as being to the exclusion of all others. If you can enjoy an item to the exclusion of others, then that item can be defined as property. In the UK, property is defined as anything that's owned by a person or entity. And I'm sure where you live. There are similar such laws on the books which define the concept of ownership. And I'm certain that no matter what they may say, they do not say the possession equals ownership. The point is, when you purchase an FTE based digital art, you are not purchasing ownership of the artwork to the exclusion of all other people. Because to do that, you'd need to purchase the copyright to the peace and be able to prove that you've done so. And simple possession of the NFT does not mean that you're now the copyright owner. So unless you've purchased the copyright to the piece and had a legal bill of sale to prove that, then you do not own the copyright to the piece, No matter what the NFT fan boy brigade on Twitter may say, at best, all you have done is purchased a non-exclusive license. Also, as you do not own a copyright, the artist is free to create as many more NFT of that same piece of art as he or she wants to. And as it happens, as I record this, a case is just hit the news where the owner of this NFT is now suing the original artist who decided to release a multiple more copies, which of course has pushed down the value of the original NF2 which the collector purchased. I suspect the collector will not win his case because as I understand it, he never purchased copyrights of this artwork. So therefore, the artist is free to do as they please. So to sum up, you, to legally own the digital art you purchased, you would need a legally binding bill of sale. Simple possession of the NFV is not enough. The other thing with digital art, of course, is that it's easily copied. You may own an NFT of a particular piece, even if you own the copyright. But there's nothing stopping me from taking a screenshot of that image and using it as I wish, as long as they obey copyright laws. If I do not try to sell the image or use a commercially, then I'm unlikely to face any consequences from copying your piece of digital art. So LFTs are not one-of-a-kind art work that you can buy in a blockchain. Now you may ask that if an NFT based digital art means that I pay money to get a non-exclusive license to a piece of art that anyone in the world can copy if they want to and that the original artists can reproduce at anytime. Then what's the point of NFT best digital art? Honestly, it beats me. I'm not sure that if owning an artwork that anyone can copy it with just a click will be attractive to art lovers for much longer once the hype dies down. I believe that this current craze of digital artist and FTEs will die off in its present form. But some valuable use cases for entities will evolve and be developed over time. At the time of recording this, however, when it comes to digital art and FTEs, I believe we are very much in a bubble. Now saying that NSAIDs can be used for a lot more than just digital art. And personally, I'm more interested in the following uses of LFTs. Publishing royalties. Nft is can address some of the publishing and music industries. Significant admin issues with blockchain best proof of ownership, and also blockchain based transaction processing. Then calculating artist's royalty payments can be simplified to the point where both the calculation of the royalty payment, the payment itself can be automated by a smart contract. Calculating artist's royalties is currently an extremely difficult process, taking multiple companies and accountants to arrive at an approximate figure, which is never a 100% correct. And at ease and blockchains can disrupt and improve that process massively. Proof of ownership. And FTEs can aid non-digital artists to help prove the provenance of their work. Art forgery and fraud is a substantial problem. An NFT issued as a proof of purchase tied to a real life art piece would make it possible for any potential buyer to trace back every sale transaction that occurred with the piece in question? Yes. Some form of industry-wide best practice or legal regulation would have to take place that would push the adoption of LFTs as a proof of purchase. But once again, FTEs are legally allowed as an ownership receipt for any type of assets than you are. I would be able to quickly sell those assets to anyone interested without the need for go-betweens. What about event tickets? I'm sure we've all known someone who has bought or almost bought a ticket for a concert or a sporting event. Nft based event ticketing allows not only for the ability to prevent fraudulent ticket creation, but it can also create a fair and transparent secondary market for event tickets, where fans can resell the tickets they purchased onto other fans. And the artist or the sport team involved can receive a small commission on that resale. By pushing the ticket resale market onto a blockchain, it can be taken out of the hands of the huge read ticketing companies that currently dominate the secondary ticketing market. Currently ticket touts or scalpers, as they're called here in Europe, make fortunes from purchasing tickets on mass and then reselling those tickets to real fans. For huge profits. Blockchain based ticketing can put a stop to this. Tickets to sort after events could even become tradeable memorabilia items as well after the event is over. Realty. Well, an NFT best property deed will remove much of the tedious legal and notary best work currently associated with buying property. By issuing an NFT base property deed, it becomes a lot easier to trade and handle the property in a fully transparent manner, completely within your own control. What about voting? And FTEs can be used to vote in elections. You're voting registration card could be a blockchain based NFT. And you control that with a private key issue to you and you alone. You could turn up at a polling booth to vote and show your ID, or simply vote from home or from your phone in a totally secure, transparent manner that cannot be faked or prevented. Virtual property in the meat diverse. Wow, okay, we're gonna get onto another one of those brain melting concepts that can be quite hard to grasp at first. Have you ever played a virtual reality game or a large multiplayer online games such as Warcraft or Second Life. There are now several such games that give players the ability to purchase property and items within the game itself. So you can purchase a one-of-a-kind weapon for your character in a game, which would be an NFT. Or in a game such as the central land, where there is no object to the game itself. You just exist in the game environment with other people and interact with them. And that interaction is actually the whole point of the game. And games like that. You can actually buy property and build a unique house or a shop selling other NFT baked goods. Or who knows, perhaps you could open the theatre for other players to interact with and for you and other players to put on performances which you charge cryptocurrency to attend. These purchases are made with the games own cryptocurrency coin and the ownership records of the things you buy, amended as LFTs. Now, buying property, it a virtual reality game. He sound like an incredibly obscure and strange investment. But there is precedent with one of the alternative reality games, Second Life. Second Life has been selling land to players for their own currency called Linden dollars. Since 2003, such as the central land, have successfully launched their own cryptocurrency coin called manner to players. And they allow players to vote on new developments for the game. These future game developments are financed from the sale of manner tokens, and the players vote on new game development's. Well, you guessed it via a blockchain based folding process. As odd as it may seem, to pay real money to buy virtual land in a virtual world, the mannitol can currently has 5.3 billion with a B, US dollars in tokens locked on its Blockchain under the control of its players. I am told, but I currently can't find a source that some $500 million of that total sum is used to finance the game developments that the players vote on. Manner is probably the most successful of what has become known as the multiverse tokens. Oh, by the way, when a blockchain based application is controlled by its users in this way, it is known as a decentralized autonomous organization or Tao. And we'll talk a lot more about Tao's and meet diverse tokens later in the course in this section on investing. Finally, I believe that personal identification will eventually be tokenized as NFT is to some extent, I am convinced that your driver's license, passport, social security card, and other similar key items of personal identity will be digitized as LFTs on a blockchain in the future. However, legislation and governments moves so much slower than the pace of technology that I do not see this happening anytime soon. But once the advantages of working with blockchain based, unforgeable identity documents becomes apparent than I believe that such change is inevitable. Okay, that's the end of the discussion about different types of cryptocurrencies, genres. We've looked at Bitcoin, Ethereum, stable coins, privacy kinds of KYC, and finally NFT. And we've briefly discussed me diverse kinds, which we will return to later in the course. As usual, if anything is unclear, please re-watch this lesson. And then if it's still an issue, get in touch with me. I'll get back to you as quickly as I can. I will see you in the next lesson, but until then, thank you very much for your time. Bye-bye. 13. 2 4 Forks : Welcome back. In this lesson, I want to quickly discuss folks and forking. And I promised to be very careful when my pronunciation. What a fox and y can forking be used to copy one type of cryptocurrency, create an entirely new type of cryptocurrency. So as you know, you can download the Bitcoin software in order to run your own node. And you don't need anyone's prior approval of permission to do so. The software is open source and available to anybody who wants a copy. So what is stopping you from taking the Bitcoin node software? But instead of view, joining the Bitcoin network is a minor. You set up your own network of minors with the purpose of releasing your own version of Bitcoin under a different name. After all, you've got the software to do it and nobody can stop you. Well, in fact, there is nothing stopping you from doing this. As long as you're able to complete the necessary technical tasks involved and recruit enough minus to form a network of nodes in order to process your transactions. If you did do that, you wouldn't be the first person to do so. Cloning and existing blockchain based cryptocurrency in this way and re-releasing it is called forking. There are a number of folks of existing cryptocurrencies in existence today, such as Bitcoin Cash, Bitcoin gold, and a theorem classic. In fairness, folks usually try to differentiate themselves from the original crypto application that they're a copy of. Usually folks occur when different parts of the development community which support the original cryptocurrency disagree on future technical developments. And one party throws its toys out the pram and decides to go its own way and recreate a new version of the project. It's fair to say that most of Bitcoin and Ethereum folks have failed to rival the success of the original projects that were based on forking. Established cryptocurrencies is less popular today than it was back in 20172018. Now, you tend to see entirely new cryptocurrencies created as opposed to people simply cloning existing ones. The term forking has another connotation as well, but this is to do with smart contracts. Remember, we said that smart contracts are written to the blockchain and everything on the blockchain is public information. So if you know the blockchain address of a smart contract, then you can read that contracts code by a block explorer website. And here is a copy of such a contract. So when someone releases a new smart contract that gains popularity in the crypto community, what we see happening is lots of people cloning that contract and adapting it in small or large ways and re-releasing it as a product of their own. This is also called forking, and it is currently common with decentralized finance applications or DeFi apps, as they're known for short. Defi apps are basically computerized financial tools that allow you to do certain things with your crypto, such as automatically converting them from one currency to another, lending them to other people in exchange for interest payments or investing them for passive income. Defi apps are the current hottest thing in crypto, and we will look at them in depth later on in this section I invest in. But when you hear about people forking a DeFi application, all they mean is that someone has copied a set of smart contracts from the project, edited them in some way, and re-released them as a new version of that project. So when you hear the term fogging, just think of it as copying somebody else's project. Okay, well that's it for this lesson. As usual, please read reviews the lesson. If anything is unclear, or feel free to send me a question. When you're ready. I'll meet you in the next lesson. But until then, thanks for your time. Bye-bye. 14. Final Thoughts: Well, hello and welcome back. Okay, Well, that's the end of our course. I hope you enjoyed the course, and I do hope you learned a few things of value. If you like this course and you'd like to take any other courses I've developed than the easiest way to find my work is put my name, Adam Daniel, into the Skillshare search box and you'll be presented with a list of the courses I've created. If you have any questions regarding this course, then the easiest way to reach me is via the Skillshare Q&A functionality. So please don't be shy. Feel free to reach out with any questions you may have. I'll do my best to get back to you as quickly as I can. But for now, that's it for this course. I do hope to see you again in another course very soon, and I wish you the very best. Take care. Bye bye. 15. Buying & Selling Cryptocurrency : Intro: Hello and welcome to section three of this course. In this section, we will look at the various options you have to buy and sell cryptocurrencies. We're going to discuss types of cryptocurrency wallets. And we will set up your first crypto wallet and ensure that it's backed up from day one. We'll look at Cryptocurrency brokerages, centralized and decentralized crypto exchanges. And we'll look in detail at what those tools are and how you can use them to buy, sell, and swap crypto. We will also look at crypto ATMs and some investment applications that also offer cryptocurrency facil. Then we'll discuss the peer to peer cryptocurrency Network where you can buy and sell crypto is directly with other crypto users. And we'll discuss why. At least for now, this is an option you should probably avoid. Will also have a quick look at a very prevalent type of crypto scam that scammers used to attack your wallets. And I'll show you how you can avoid that ever happening to you. By the end of this section, you'll have your own cryptocurrency wallets setup unsecured. You have sent your first crypto transfer, and you will be well on your way to opening your own account. Your choice of cryptocurrency, exchanges, brokerages. Now, I know the first two sections of this course, we're very theory heavy and hard going and places. In this section we'll kick back a little and a little less theory, a lot more fun. I'll get some hands-on experience using cryptocurrency for real. Okay. There's a lot to cover. When you're ready. Please meet me in the next lesson. Let's go. 16. Crypto Wallets Explained: Hi, and welcome back to this lesson about cryptocurrency wallets. As we discussed in earlier lessons, in order to send or receive any type of cryptocurrency. You need a crypto wallet to store your private keys, antisense transactions to the blockchain. That's what it does. If you want to transfer your crypto us to another person, you send a transfer requests to the blockchain via your crypto wallet, which signs are transaction using your private key. In this way, the blockchain knows that this is a legitimate transaction that can only have come from you. Now, it goes without saying, but I'm going to say it anyway, that you should never give anyone your private keys. They are the passwords that allow you to control your cryptocurrency would be like giving someone the passwords and pin codes to your online banking application. Now, I know I sound patronizing when I tell you that. But it's surprising how often this simple rule is forgotten by crypto users. We address private key safety in later lessons on cryptocurrency, scams, and scammers. But there's a hard rule. Never give your private key to anyone and never inputted into anything other than a copy of the crypto wallet it came from. Even if you have a technical issue with the wallet and a technical support person reaches out to you, asking for your private key. Don't give it to them. No one who asks your private key is a legitimate technical support person. That person is a scam. Okay, Enough with the fear mongering, let's look at crypto wallets. Well, first let's discuss the three types of wallet in a little more detail. As you know, we have software wallets, hardware wallets, am paper wallets. So software wallets. Uh, software wallet is an application that you can download to your computer or mobile phone, which will save your private keys on the same device that the application is downloaded on. In the next lesson, we will download a free software while it and set it up on your computer. But before we download that wallet, or indeed any crypto wallet, let's walk through a list of best practices to protect yourself. And don't worry right now about memorizing all these points. These are things we will come back to again and again as we move through the course. I hope and I repeat such points in this course, you do not get too frustrated with me for repeating myself. I do so deliberately to ensure these points becomes second nature to you. Okay? So what are the best practices to keep in mind when working with crypto wallets? Well, when you download any crypto wallet software, please make sure you're downloading it from the correct website. Double-check the correct website address from different sources. You're confident you're getting that software from its actual developers. If you're downloading a mobile wallet to use on your phone, please make sure it's the legitimate mobile app. It's best to use the download links from the original software designers website as opposed to using the links on the App Store. So don't just search on the App Store for a mobile wallet. Because there have been multiple instances of fic crypto wallet apps being released on the Apple and Google app stores. And uses that installed those wallets, I ended up losing some or all of their cryptocurrency also never fall. A third party links from a social media post, instant message or e-mail to a cryptocurrency or banking website. In general, you should not trust links that other people give you online. But that is particularly true when it comes to cryptocurrency. Get into the habit of double-checking the links people give you to make sure they're legitimate. Please get into the habit of verifying website addresses related to cryptocurrency applications. And then when you know you're on the correct side, bookmark it, and always use that bookmark to navigate to that site. Because fake websites are also not uncommon in cryptocurrency. I even want you to double-check the links that I give you in this course so that you get into the habit of doing justice when using search engine results to find the correct link for a website, make sure you can tell the difference between an advertised link and the search engines own search results. Never click on a crypto add in a search engine. Scammers have used these in the past to direct people to fake websites designed to steal your personal details and hopefully steal the login details you use to the websites where you buy and sell your crypto. So there's no need for you to live in fear of scammers. But you do need to be aware that out there and they're constantly active. So don't live in fear of them. But to begin to develop good habits to ensure you avoid them. Okay, well, that's the patronising, but over, Let's talk a little more about hardware wallets. As you know, a hardware wallet is a physical device which stores your private keys. You control the wallet either via downloadable software or using software you access via the manufacturer's website. Hardware wallets, uh, generally considered a safer option. And software wallets, as your private keys are not stored on your computer. There are multiple brands of hardware wallet in use today. The most popular or the ledger nano x and the treasure Model T. I own both and I personally prefer the ledger device. They both have advantages over each other. These devices can also function as a USB security key, which is a login approval device that you can use in conjunction with email and cryptocurrency websites to help prevent unauthorized access to your account. And we'll talk more about US security keys a little later in the course. If you're going to hold any sum of money and crypto for a period of time than I strongly suggest you purchase a hardware wallet. And I don't get paid for telling you that I'm not on some form of commission. If you happen to buy one. If you do decide to purchase hardware wallet, make sure to only buy it directly from the manufacturer's website. Some considerations when buying hardware wallets are ever buy a used hardware wallet or abolish from eBay or anywhere other than direct from the manufacturer. Is that while it may have been tampered with, make sure you're on the correct website when you make your purchase. Ledgers website is www.legend.com, but please go to Google, type in ledger hardware, wallets, double-check that I've given you the correct link. Traces website is www dot tracer dot IO. But again, check that link on Google. In the Google search results, make sure to follow the correct links to the treasure or lead your website and please do not follow any third party links are paid advertising mix that might appear at the top of the screen. And when I say google, of course you can use any search engine you like. I personally like using DuckDuckGo, which despite the silly name, doesn't track your web usage like the other search engines do. If you use DuckDuckGo along with Brave browser, your internet experience is a lot safer, faster and more enjoyable without all the adverts and the hidden traveling mics. And when you put Brave browser on your mobile phone, trust me, you're gonna be surprised at how fast your mobile browsing becomes. Okay? Finally, a couple of words about paper wallet. Now, you can use a paper wallet for cold storage, not for sending transactions. As obviously a piece of paper can't run the software needed to send a crypto transaction. Cold storage of crypto assets utilizes a cold wallet. As such, cold wallets are disconnected from the Internet and reduce the risk of a hardcore, excellent. Writing your private key onto paper and saving that paper somewhere safe is one form of cold wallet. People sometimes even engrave their keys onto metal plates. Remember, your crypto is live on the blockchain and do not actually live in your world. Or what it does is secure your private key. The way this works is you create a new public and private key pair using software designed to do that, that is not connected to the Internet. You then send your crypto is from your regular wallets to the new public wallet address. Then you write that address along with its private key on a piece of paper. The advantage of this is the private key we just wrote down has never been stored on any device ever connected to the web. So it's absolutely safe from hackers. So if you do not want to make transactions for a long period of time, then you do not need a software or hardware wallet. You could just write down your private key somewhere safe. If you do write down your private key and then you lose that piece of paper and your cripples are effectively lost. Crypto is we'll sit on the blockchain forever and nobody will ever be able to access them. This has happened to many people already, and billions of dollars in cryptocurrency is effectively lost. Please, or agile crypto still Atlas. Okay, well that's the end of this lesson. Thank you for your time. And please don't worry if some parts of this lesson did not make perfect sense to you. We will revisit many of these points in the lessons to follow as they are fundamental to everything you do encrypted. When you're ready, please meet me in the next lesson where we will set up your first cryptocurrency wallet. For now. As always, thank you for your time. 17. The Metamask Wallet: Hello and welcome back. Okay, that's enough theory. Let's do something. In this lesson, we're going to set up a software while it called MetaMask or MetaMask, that is compatible with all of the investment options that we will look at later in this course. However, there is one drawback with MetaMask. It does not work with Bitcoin. Therefore, once we've set up the MetaMask wallet, I will show you how to select a Bitcoin wallet just in case some of you actually want to purchase them Bitcoin in the immediate future. As a MetaMask, it is a browser extension, which is an application which works in cooperation with your web browser. So please use Google or abduct go if your school is me, and search for MetaMask so that you can confirm that the website URL for MetaMask is indeed MetaMask.io. Now, MetaMask works with Google Chrome and brave process. If you use the Safari or Firefox or any other process, that's great. This continued to do so. But for this course, you will need to download either Brave browser, Chrome that we can install MetaMask. I strongly recommend you choose Brave browser as it has ad blocking built into it. A standard, brave does not track your Internet use in the hidden ways that Google Chrome does. Umbrella will also pay you to watch advertisements. The payments are not huge, but they do add up all the time. You get paid in BAT tokens, which are brief browsers, own cryptocurrency. Links for Brave browser and Google Chrome are shown here. But of course, you're not going to take my word for that. You're going to double-check that information for yourself. No, you're not already using brave or Chrome. Then please pause this lesson and install one of the two now. Okay, please do that now. I am currently using a Chrome browser here to install MetaMask. So the first thing we want to do is come up to the Download button. And now it'll ask us if we're going to put room. Ios, Android. I'm not installing this on a mobile phone, I'm installing it on my MacBook. So we'll click Install MetaMask for Chrome. If you're using brave, it'll give you different options here. And then the link from the website takes you straight to the Google Chrome store. So I'll click Add to Chrome. And then you're going to need to click Add extension here. This is a browser extension. And of course, a browser extension is a piece of software that runs within the browser. Again, as you can see up in the top right corner here, MetaMask has been added. So first thing we need to do is click on this little jigsaw piece icon. Next to MetaMask. I'm going to pin it. So that MetaMask is always visible here in the top right hand corner of my browser window. And here we are. And let's click Get Started. We're going to create a new wallet. So click the option on the right. And it's up to you if you click yes or no to this. If you click Yes isn't just send anonymous information back to MetaMask so they can gather information on how their users use their product. You don't have to. I'm going to click. I agree. Okay, so create your new password and click to indicate you've read the terms of use. Now you're going to need to watch this video about secret recovery phrases. This video will introduce you to the concept and we will speak a little more about it afterwards. And then click pause on this video whilst you do that. And once you finish watching this video, just click next. Okay. Now I'm going to click to reveal my secret recovery phrase. If you watch that video, you now know what that is. And here's my recovery phrase. I'm going just gonna write that down. Now. Your secret recovery phrase is supposed to be a secret. I'm showing you mine because I'm not ever going to store any cryptocurrency in this wallet. Once I've made this video using this instance, the wallet, I'm simply going to delete it. But in your case, you do not ever want to show anyone this phrase. The way you use this phrase. If you ever get a new laptop and you re-install a browser window, and you then want to re-install MetaMask. What you do with MetaMask is instead of setting up a new wallet, you choose to restore an old wallet. And then you use this phrase to restore your old MetaMask wallet into your new browser. So now we're asked to reconfirm our signal recovery phrase in order. And obviously if you get it correct, you see this screen and there are some tips here on best practice of looking after your secret recovery phrase. Never share it with anyone. Be careful of fishing MetaMask will never ask you for that phrase. If you ever lose the cigarette company phrase, you can actually get it from within the wallet itself by going to settings and security. Okay, all done. And here's just a little some information on some changes they're making. Shows that. Here is my MetaMask wallet. This is all set up and running. And up here where it says account one. I'm going to click where it says copy to clipboard. I'm going to click paste and paste that. And that. And that is my ethereum wallet address. For this wallet, In your case, obviously, you're going to have a unique address. I'm just going to click on the MetaMask icon and I'll give you a quick tour of the wallet. While it is currently connected to the Ethereum main net, that is the main ethereum network. If you click to the right of that, then what we can do and what we will be doing later in the course is adding more networks through the ad network option here. So you can connect this wallet two different cryptocurrency networks. This little pattern circle there allows you, when you click on it to create new accounts, you can get more valid addresses. You can import an account if you have an account on a MetaMask wallet or on any other theory, and while it's somewhere else, you can actually import it into this wallet as well. You can connect your hardware wallet and control that from MetaMask. That's not something we'll be doing in this course, but you can do it. And here you can click the Contact me to my support and here are your settings. And we will be adjusting a few of these settings throughout this course. So if you wanted to refresh your memory on your secret recovery key, you would come here, go to Settings, security and privacy, and reveal. And reveal your secret recovery phrase by using your password. And there's my secret recovery phrase. If I was to go here to the right of my wallet address, click these three dots, go down to account details. I could actually export my private key. Once again, I type in my password. And there's the private key that corresponds to my public key. And again, obviously that's a secret information. You wouldn't normally share that with anyone like I'm doing here, but I'm not ever going to put any cryptocurrency into this wallet. If somebody did have this private key and there was a theorem in this wallet, they could just put this private key into their wallet and they'd be able to steal my ether. Okay, so we set up MetaMask. I'm going to end this segment here. And in the next couple of lessons, we're actually going to use this and send a transaction. But for now, I'm just going to end this segment right here. Well congratulations, you got your first crypto wallet setup, installed and backed up. And that is the end of this lesson. When you're ready, please join me in the next lesson for now. Thank you very much for your time. 18. The Wallet Sync Scam & How To Avoid It : Well, hello and welcome back. Okay, I'm going to discuss this type of scam now, just in case you run up against it after we install your crypto wallet. Before you've had a chance to watch the full lesson on crypto scams later in this course. The Wallet syncs gum is an attempt by scammers to get you to revolve your wallet secret, restore QI. All to connect to a website which will drain your wallet of crypto coins. So how does this scam manifest itself? If you ever post a question about cryptocurrency on social media, most people will reply to you in publicly viewable replace. And you can treat those responses with caution as he should any online information about crypto. But more often than not, you will receive honest, well-meaning advice. What we'll probably also happen sooner or later is that a scanner will send you a private message. A message that only you can see. The scanner may pretend to be a customer support agent from irrelevant company or just a helpful stranger offering good advice. The direct message will advise you to think your wallet with their servers or refresh your wallet from their servers. Connect your wallet is some kind of website or some other sort of techno babble. Your new social media friend will then direct you to a website which will ask you to enter your wallet secret recovery key into a web form on their site. If they did not do that specifically, then they may direct you to a website and asked you to connect your wallet to that site. Or they may give you an application to download to your computer or phone. Should you follow the scammers instructions, then they will steal your crypto is by transferring them to a wallet that they control. Unfortunately, I routinely read posts online where people have fallen for this scan. Now, this gamma is at its most dangerous when you are actually expecting to hear from a certain company as you've sent them a message asking for help. So when the private message pops up from that company discussing your problem, you're not automatically a suspicious of that private message as you should be, because you have been expecting to hear from someone. As it happens, the legitimate technical support people that you can speak to online do not send you private messages for this very reason. They will always contact you via a publicly viewable message. And then you can take that discussion to email if necessary. So please, no matter what the circumstances, never share your recovery keys are private key with anyone. Even if this person seems to be a support person helping you with a technical issue and don't worry about offending someone by treating them with suspicion. If they are a legitimate support person, they will totally understand and appreciate your caution. When we get to the section on cryptocurrency scams, I'm going to perform a real-time phishing exercise to see how many scammers I can attract with just one social media posts so that you can see the scam and action. It'll be like shooting fish in a barrel, but they've me. Okay. As I've said before though, you don't have to live in fear of these cameras. It's just a case of getting to know their methods and learning to spot these people when they cross your path. Okay, well, that's the end of this lesson. Thank you for your time. And when you're ready, please meet me in the next lesson where we're going to send our first cryptocurrency transaction till then. Thank you very much for your time. 19. Sending a Cryptocurrency Transaction: Hello and welcome back. In this lesson, we're going to send your first corporate transaction in order to get some free cryptocurrency into your new MetaMask wallet. We're actually going to use the theorem test network so that we can get accustomed to our new MetaMask wallet and sending and receiving cryptocurrency without needing to actually pay any money just yet. You see theorem has a test network where developers and users can make test transactions using pretend ether coins that have no real-world value. We're going to use this test network to receive your first crypto transaction. First thing we need to do is connect your wallet to the theorem test network. Open up MetaMask and click on the arrow at the top next to where it says a theorem main net. Click the Show Hide Test networks link. And MetaMask will now open up the second option and ask you to enable test networks. Now click the arrow next to Theorem may net again and choose the eruption class network. Metamask is now only going to send and receive transactions on this test network. Okay, now let's get some test ether. We're gonna do that by going to a special website called the faucet, which gives away small amounts of cryptocurrency. Okay, so the first thing we need to do to send our tests transaction is to get some test ether, also known as our f, which stands for ropes. Than either. Do this, we're going to go to a website called a faucet. And older force it does is send you crypto. So the website you want to go to is called send crypto dot because this is a false ID that has been set up specifically by me. For students of this course. Once you get there, you will need a username and password. The username is pretty and the password is please, everything is lowercase. When you get to the full set, please come here where it says faucet stats and check to see if there is any test ether available. The force it will send you 0.1, RF2, your MetaMask wallet. There needs to be at least 0.1 F in the wallet at any one time. As you can see at the current time, there's just over 60 RF available. So we're good for this transaction. What I want you to do then is open up your MetaMask wallet. Got your account. In this case, I'm in account number two. You'll probably be in account number one. And just click where it says the account name. And that will copy your wallet address to your clipboard. And simply come over here, paste your wallet address into the text box, and click give me Roxanne. And if everything goes well, a little green box will pop up that tells you that you have successfully cubed 0.1 f to be sent to your wallet address. Now this process can take about 30 minutes. Sometimes it's very quick, sometimes it isn't. It depends on the speed that blocks are being mined on the ropes and network. Once again, if we come up with a faucet stats, you can see that there's one recipient currently in the queue to receive from this smart contract. And you'll see the block number being displayed. Generally when that block number increases by one or two blocks, then your transaction will be processed. If you'd like to watch your transaction unfolding in real time, then the address of the smart contract is shown here where it says faucet. Simply right-click that and choose the open link in a new tab. Here you can see a list of every transaction that the faucet smart contract has ever participated in. Once your transaction is mined, it will appear at the top of this list. When your transaction does get mind, a small piece of texts will pop up letting you know that once this mining process is complete, the ether will be sent to you. So our transaction has been mined successfully. I pop them in the MetaMask wallet. I can now see that the 0.1 f is successfully in my wallet. I can also, if I want to go to the ether scan page, click on this transaction hash here, and it will display all the transaction information about that transaction. The transaction hash, it shows me that it is a success. It shows me what block my transaction was mined in. And it gives me a timestamp and some to and from information, as well as the cost of the transaction and the amount I sent. Now, for any reason, if when you come to this force it, you can't get into it if the website is offline or four or if there's not sufficient our F available in this forsake, you can go to this force it, which is faucet.MetaMask.io. As you can see under the balance, they have around 8 million ether available for you. And it will send you one ether if your transaction is successful, as opposed to 0.1 from the force that the ice out. However, this is quite possibly the most popular test force it online on the ropes and network. And as such, it's under huge demand from developers around the world. All you need to do is come here. It will automatically detect your wallet address and you click to request one ether. Now, if your transaction is successful, information will pop up here in the transactions section to show you that this force is about to send you one ether. In my case, however, I've received an error message. Generally, you're going to receive an error message. Unfortunately, as you can see here, there aren't too many requests. At this point in time. There are simply too many people trying to get ether from this, force it. Okay, so once we have the ether in our account, in my case it's an account number two. In your case, it's probably going to be an account number one. Let's now send a transaction. And that's really easy. But the first thing we need to do is get a destination address. So we're actually going to send this ether to ourselves. So in order to do that, you need to create a new account on your MetaMask wallet. That is very simple to do. Click here in the pattern circle and come down to where it says Create Account. In my case, it's now creating the ninth account on this wallet. In your case, this will probably be called account to click Create. There you go. You will now be in your new account. The difference between accounts is just the wallet address. It's a different public key and a different private key. So I'm now going to click here where it says account nine. In your case, please click where it says account two. And that will copy the address to the clipboard, clicking the patent circle, and go back to the account where your test ether is, in my case account, to come here and click the Send button where it says send to paste the address of in my case account name and your kids account to the asset we're sending is ether. So you don't need to change anything here. The amount, well, as I've got 0.1 ether, I'm going to send half of what I've got. I'm going to do, I'm going to enter 0.05. Then click the next one. Here's my transaction information. I'm sending ether, sending 0.5 ether is my estimated gas fees and the total cost of the transaction. The total cost of transaction will update every few seconds as the cost of ether changes in real time. Once I'm happy with everything, I click Confirm. Now returned to the account page on my wallet. As I can see in the queue, I have a pending transaction sending 0.5 ether to this wallet address. If I want to look at this transaction information on ether scan by simply click the transaction in the queue. The summary of the details is brought up for me to read. And I can click here where it says view on Block Explorer. And here is my transaction as it's happening in real-time. Currently the status is pending as my transaction has not yet been mined. We don't know the block number. Here's a timestamp, and here's the wallet I'm sending from, and here's the one that I'm sending to. Okay, I paused the video that this transaction took about 3040 seconds. As you can see, it's now successful. We've got one block of confirmation currently froms to refresh this page, that would probably increase. There we go, three current block confirmations. Eventually that will be thousands of conformations. If I go back to my wallet, I change accounts, I go from account to two, in my case, account nine. You can see here is my 0.05. There you go. That is a crypto transaction. If you cannot obtain any test, if I go to the Discord server that comes with this lesson. And there will be a channel on the side where you can request test ether directly from me. Unfortunately, it may take me anywhere from four to 24 hours to get back to you and send that to you. Earlier, we discussed that you can send different ERC-20 tokens on their theorem network as well as the ether coin. No matter if you send ether via the theorem network or some ERC20 tokens, you always pay for the gas phase in ether. The native kind of the theorem network. Paying for transaction fees with a networks native coin is almost always the case in crypto. If you use the avalanche network, you pay your gas phase in their native effects. If you use the harmony network, you pay a gas phase in their native coin. One, therefore, always tried to keep a small balance of the networks. Native coin in your wallet, cover any transaction fees. Okay, Well that's enough for this lesson. I hope you are able to receive test if a participant in sending a test transaction, if for any reason you are not able to receive any IF and post a message with your wallet address in the Discord server that accompanies this course. And if I have any test ether, I will send you. So there's always, please re-watch this lesson if anything remains confusing. And when you're ready, I'll see you in the next lesson. We discussed how you can buy cryptocurrency. Until then. Thank you very much for your time. 20. Bitcoin Wallets: Hello and welcome back. So we've installed a MetaMask wallet, which is a very flexible wallet that you can use with a lot of the various cryptocurrencies in existence today, with the exception of Bitcoin. So if you have any desire to buy Bitcoin soon, then in this lesson, I will show you how to get a Bitcoin compatible wallet for you to use. Even if you have no particular pressing desire to buy Bitcoin anytime soon, you can still watch this lesson as it's still useful information. As we just discussed, you could buy Bitcoin from a brokerage or an exchange and just leave it in your account on that website. Which means that you do not need your own Bitcoin wallet. But this is not the widely regarded best course of action. If the exchange gets hacked or if they restrict your account for some reason. And you will not be able to access your Bitcoins. So it's always best to keep your own cryptocurrency in a wallet that you control. As you already know, my recommendation is for you to purchase hardware wallet. However, if you don't want to pay for a hardware wallet, you can use any of the wallets recommended by the very reputable website, bitcoin.org, which will give you a selection of software wallets that you can download on your computer or smartphone. So go to bitcoin.org and always make sure you're on the right URL to protect against phishing sites. And then select, Choose your wallet. A series of helpful questions will now be displayed asking you about the computer or phone operating system that you use and a few other questions. The big kind of org website will then give you a list of options for you to choose from and the link to each of the relevant websites. So you can download and install the software that you've chosen. There are many different options of wallet available, far too many for me to go over in this lesson. So this is where you'll start to do your own research for the first time. By learning how to use your Bitcoin wallet software. It will operate in a very similar way to the MetaMask wallet we just set up. Oh, and before we start sending real money transactions, please watch the next lesson in this course about test transactions before you do anything. As always, please re-watch this lesson if anything remains confusing and when you're ready, I'll see you in the next video. Until then. Thank you very much for your time. 21. Using Test Transactions: Hello and welcome back. In this lesson, I want to talk to you about test transactions, which are a way of ensuring when you do send cryptocurrency from your wallet that everything goes as it should. Remember, the crypto transfers a onetime and one way. Now, if you careful, it's pretty hard to mess up a transfer, but mistakes can happen. So sending a test transaction is a good way to make sure that if you do make a mistake, it doesn't cost you a lot of money. Basically, as the name suggests, before you send a crypto transfer, you first send an initial transfer of just a dollar or two to the recipient's address. If this initial transaction is received without any issues, then you can go ahead and send the rest of the main transaction. Even after many years in crypto, I still routinely send test transactions. I'd strongly recommend you pick up this habit. And trust me, one day, you'll be glad you did. And just as a quick example to show you that practicing what I preach, as you can see here. With this one transaction, on the 22nd, on the 23rd of January, I sent 121 tokens before I sent my main transferred 10 thousand to actually sent to cash transactions. I obviously wasn't paying attention to what I was doing that day. And back here on the 4th of January, it would transfer of 526 phantom tokens. But if we just look on the next page quickly, you'll see that I sent a cash transfer of five tokens. Can't stress enough what a good habit to get into the sand test transactions before you send the bulk of your crypto transfer. Its pop of a MetaMask. Here I am in my main theorem account. And let's go through sample transfer. I've just gotten into account number two. I've copied my wallet address into account number one. Let's pretend I'm gonna send some tokens to myself. Okay? One thing we really want to ensure that we're doing it this point is sending our transfer to the correct address. When we do that by making sure that we have a note of the address we want to Send to. And then the easiest thing to do is compare the first four or five digits and the last four or five digits of the address we wish to send to the first four or five digits, and the last four or five digits of the address that we've pasted into our wallet. Now, why would we need to double-check? These are the same, you may ask because obviously we've copied and pasted them ourselves. There is a nasty little piece of malware circulating cryptocurrency circles, which if it infects your computer, will recognize when you copy a cryptocurrency address and we'll change it in your clipboard for a cryptocurrency address of the wallet of the scammers. You will copy a wallet address and then when you go to paste it and commence your own crypto transfer, you're actually sending your cryptocurrency to the scanner. So that's why it's good practice to always double-check. The address that you paste into your wallet is the one you actually want to send cryptocurrency to. And I talk about this more in the upcoming lessons on scams and that's what we want to check. The other thing we want to check it out gas prices is our estimated fees. If I was to go ahead with this transaction, which I'm not going to I'm not actually sending anything. And they record this transaction is going to cost me 161, which means I need to have another $1.61 in F in my wallet to commence this transaction. In fact, if I didn't have that, well, it wouldn't let me send this anyway. So let's reveal personally, I almost always send a test transfer because remember, you have to transverse a onetime and one way you make a mistake in never gonna get this Crypto back again. Okay, well, I hope that was straightforward. As usual. If anything is unclear, then please re-watch this video or reach out to me with any questions you may have. And I'll get back to your code because again, but for now, this is the end of this lesson. When you're ready, I'll see you in the next lesson. But until then, thank you very much for your time. 22. Crypto Brokerages: Hello and welcome back. In this lesson and a few of the follow, we will look at how you can buy cryptocurrency. You have several options available to you, and we will work through those options in the rest of this section. First of all, I'd like to discuss cryptocurrency brokerages. And let me start by saying that I am not using the term brokerage in its usual sense here, I define a crypto broker as a simple to use website, which acts as a go-between between its users and a cryptocurrency exchange. You see a cryptocurrency exchange, which we will look at in the next lesson, operates like a stock trading application. He's quite complicated functionality aimed at professional traders. Exchanges come with a learning curve and can be a little intimidating for new users. So crypto brokers operate websites and applications where you combine sell crypto in a much simpler way than a crypto exchange. However, in general, the price you pay for your cryptocurrency at a brokerage will usually be slightly higher than at the exchange as the broker, as a fee or two every transaction. So the price will be a few percentage points higher than the market price you will find at the exchange. So the main differences between a crypto broker and a crypto exchange, ease-of-use and price brokerages I have used personally and find straightforward and reliable are bits panda. At bit panda.com. This is where I bought my first Bitcoin in 2016 for just under $500. Oh, how I wish I bought a lot more at that price. Then we have Coinbase. Coinbase.com. Canvas has two products. They are regular product, which is pretty easy to use, and it's professional training application called Coinbase pro. In this lesson, I'm talking about the regular Canvas product, which you can find at www.coinbase.com. Then we have E Toro at E Torah.com. And this is more of a stock trading application, but you can purchase cryptocurrencies here if you wish. Although Ito's prices are not the best. But if you happen to already have an eater or count, then it's an easy way for you to buy crypto. I wouldn't recommend you open an account of eternal just to buy cryptocurrency, you do have better options. I believe you can also know by crypto on PayPal and with the Robin Hood trading application. But I have not done so myself. So you will be able to buy a selection of the more popular cryptocurrencies at any of these brokers. If you choose to open an account at one of these brokerages, then you will need to provide them with KYC information. They will ask you for a copy of ID, such as a driver's license or passport, a copy of a recent utility bill so that they can verify your residential address. And you may also have to take a photo of yourself or scan a photo of yourself via your mobile phone. Okay, so let's assume you do want to buy cryptocurrency at an online brokerage. Just how do you do that? Well, first of all, you have to fund your account. Initially, this will probably be done by a bank transfer or by using a credit card. Now, depending on where you live or which bank you use, you might find this problematic as some banks and credit card companies are not particularly very crypto friendly. If you do find that your bank is stuck in the stone age and won't let you transact with your chosen crypto broker, then PayPal, eternal or Robinhood may be an option for you as your bank may have a more favorable opinion of those companies when it comes to let new transfer your money. As an aside, these barriers to you transferring your money to a crypto broker is one of the downsides of a centralized finance system. As you know with Bitcoin, there is no central control and authority telling you where you can and you can't send your money. Okay? So once your account is funded by a bank transfer or credit card deposit, you can buy whichever cryptocurrency you wish. Depending on the brokerage you choose, there will be slight differences in the processes to buy cryptocurrency from one to the other. But all of the three brokerages I listed have made the process pretty straightforward. And of course, there are guides and help pages available to you on each of those sites. So please follow the instructions on the brokerage side if you want specific guidelines on how to use their tools. If you have any difficulty doing this, I can't work out how to use their site. Then reach out to me on discord and I'll do my best to help. When you've made your purchase. You can now either leave your cryptocurrency on the brokerage website in your account. Or you can transfer those scripts to your own wallet. If you choose to leave your crypto is on the brokerage side and keep in mind, and that's I can hack. You may lose your crypto. Whilst this is not a common occurrence, it has happened often enough for it to be considered bad practice to leave your crypto is on a brokerage or exchange account for any length of time. Also, should the brokerage or exchange ever have reason to restrict your access to your account? Well then your crypto is will be inaccessible to you. So after you've made a purchase, I suggest you then transfer those crypto is from your brokerage account to your own crypto wallet. There's a saying in the crypto community, not your keys, not your coins. Which means if your crypto or not in a wallet where you control the private key and those crystals are not yours, they're not under your control. This is why I suggest you keep your cryptocurrency in your own cryptocurrency wallet whenever possible. So let me log into my bit pander account and we'll use that site as an example. We will look at how we fund a bit pounder account, how we buy and sell cryptocurrency at bit panda. Okay, Well, here we are actually in my Coinbase account, not my bid Panther account. And I'll just walk you through the basic steps that a crypto brokerage will ask you to perform in order to purchase cryptocurrency. So in Coinbase, you need to add a payment method. In this case, as you can see, there's a Visa card, there's a PayPal account, and there's a couple of bank accounts that I've linked into my Coinbase account. And the method of doing that is very simple. You click Add a payment method. I'm calling this will walk you through the steps necessary to link your PayPal account or various bank account or credit card into your Canvas account, at which time you can make a deposit. So here's my account. There's some funds in that account. And for me to purchase cryptocurrency at this point is very simple. I just hit the buy and sell button. I choose my cryptocurrency from the list of Canvas offers. As you can see here, there's an extensive list, but let's just stick with Bitcoin. And let's say at this point, I wish to purchase 100 years worth of Bitcoin. I type in €100. Hit the Preview button, displays a transaction information. And I can click to buy. Okay. And there you are. I have just purchased 0.0246901 of a Bitcoin, or approximately 100 years worth of today's prices. There's a summary of my transaction. So the necessary steps once again, are you open an account by providing your personal details. That's the KYC process. You then links and payment methods to your account. You fund the account, and then you're free to purchase your cryptocurrency. So now I have just purchased 0 to four of the Bitcoin. I could leave that in my account on Coinbase, but let's not do that. Let's send it to my hardware wallet. So here's the Send page. I can either send the amount in euros or the amount of Bitcoin. So I'm going to choose Bitcoin 0 for Bitcoin. And here where it says two, I'm just going to press my Bitcoin wallet address. Continue. It'll ask me to confirm, click Send. And Coinbase will now send that Bitcoin to my hardware wallet. Well, okay, well that's it for this lesson. As usual. If you have any questions, please feel free to reach out to me on the Discord server that comes with this course. And I'll do my best to get back to you as quickly as I can. When you're ready. I will see you in the next lesson where we look at cryptocurrency exchanges. But until then, as always, thank you very much for your time. 23. Two Factor Authentication: Well, hello and welcome back. Now, I know I cited in this lesson we're going to look at crypto exchanges. But I changed my mind because I want to have a quick chat with you about something called two-factor authentication. And it is an optional and additional check. This added into the account login process. It is in your absolute best interests to enable MFA on your online accounts. And I'll tell you why. With two FA enabled, there is an additional check added into the account login process. So as well as entering your login ID and a password, you're also asked for an additional piece of information. That piece of information can take several different forms. But most commonly it is a temporary PIN code valid for a short period of time. A PIN code, more often than not, is generated by an application which you install on your smartphone. The logic behind to FA is that even if for some reason a hacker has discovered your account login and password, they would still need to have physical access to your phone in order to log into their account. Let me just repeat myself there. I strongly recommend you add two FA any crypto brokerages or exchanges that you joined, as well as this, I also suggest you add this option to your email organs and to your online banking logins. There are very good reasons for this, which we will discuss in more depth in the later lessons in this course about crypto scams and scammers. If you are new to, to FA, have never used it before, then go to Google and search for the Google Authenticator app and install that onto your mobile phone. If you've never used to FA before, please watch the video shown on the authenticator app page. That'll answer most of your questions. When you first enable to FA on a website like Coinbase or big panda, they will display a QR code which you scan with your mobile phone using the Google Authenticator app. The app will then give you a six digit number to enter into the website. Once you do this correctly, then to FA is enabled on that account. From their non every time you login to that account, you will enter your login details and a six digit code that's given to you by the Google Authenticator app. And that's six digit code changes routinely. You can enable to F8 on as many websites as will let you do so. And each of those sites will have a separate entry in your authenticator app. Now there are other two FA apps out there that you could use. But I suggest you use the Google Authenticator app at least for now until you get more experienced using to IFA. Okay, well that's two-factor authentication. As I said, we'll look at it in a little more detail in the lessons about scams and scammers that follow in the next section. Let's the end of this lesson. As always, if you have any questions, please reach out to me and I'll do my best to get back to you as quickly as I can. When you're ready, please join me in the next lesson. But for now, as always, thank you very much for your time. 24. Centralised Crypto Exchanges: Hello and welcome back. Okay, let's look at centralized crypto exchanges. Firstly, let's discuss what a centralized crypto exchange is. And for ease, I'm simply going to refer to these as exchanges or crypto exchanges for the rest of this course. This type of exchange is run by a company. It operates its own computer servers where it's exchanged software runs. The servers are centralized, meaning they do not run on a blockchain based, decentralized network. They are just regular web servers running on the internet. Because of this, centralized exchanges can sometimes do get hacked and lose large sums of cryptocurrency to the habit. This is an uncommon event. But saying that this is one reason why you should not store your cryptocurrency in your account on a centralized exchange for any length of time. Remember, not your keys, not your coins. Uh, Crypto exchange operates very much like a stock trading application. You open an account, provide KYC details, and fund your account with a bank transfer, credit card or crypto transfer. The exchange then offers you trading pairs where you can convert one asset class into another. For example, USD BTC trading pair is the pair you would choose if you wanted to buy Bitcoin for US dollars or sell Bitcoin per US dollar. As well as being able to trade feared currencies like dollars or euros. For crypto, there will also be crypto to crypto pairs where you can exchange one cryptocurrency for another. You're often going to see BTC aspects and many stable coin base pairs, such as BTC, USD T, or BTC die. If you recall, us d t and dy are stable coins whose value is pegged to the US dollar. So those kinds always costs $1, or very close to $1. Now, should you open an exchange account? Well, in my opinion, Yes, You should. It would be very difficult for you to participate in the crypto economy without an exchange account. In fact, I would suggest you get more than one. I've had multiple accounts over the years, but the exchanges I personally favor our BitStamp at BitStamp dotnet. Now, I've not used BitStamp there for some time, but that's got nothing to do with their product of company. Bitstamp offers only the most popular cryptocurrencies for sale. As such, if you want to buy less commonly treated crypto is, it's likely they don't list them at BitStamp. Bitstamp as a company is registered in Europe. Coinbase.com. Now I use Canvas a lot as they have the best crypto to fit withdrawal speed. I found when I sell crypto unkind best for euros, a transfer into my bank account kick second. Please note that Canvas is famous for very slow, very poor quality customer support. I personally haven't had any issues with Coinbase that required me to use their customer support. The people that have had to use it complained quite a bit. Canvas has a decent selection of crypto coins and tokens for so. This is registered in Europe, the UK, and the USA. Even though their customer support is poor, I would still recommend opening an account with Canvas. Now you have a company called cocaine. Cocaine is an offshore exchange registered in the Seychelles. I use cocaine simply because of the sheer number of trading pairs they offer. I do not know of an exchange anywhere that offers more types of crypto for trading than cocaine does. Now could also receive terrible reviews for customer service. I'd still suggest you open an account and I'll explain why in a minute. Now, here's some advice about using crypto exchanges. Do not leave your assets on an exchange for safekeeping. That's what your crypto wallet is for. Use in exchange for making trades or making exchanges from one character to another. And when your trade is over, them withdraw your assets either to a bank account in the case of feared currency, or to a hardware wallet in the case of crypto assets. Now, why do I say this? Well, as we've discussed already a few times, if the exchange gets hacked and you may lose the contents of your account. This is really quite a rare occurrence, but it can and does happen. The most likely issue you will have if you keep your cripples on an exchange is falling foul of the exchanges own risk management processes. You may make a perfectly innocent trade or deposit or withdrawal requests. For some reason, the exchange automatically launch your account for a security review. This process can best take days and in the case of kindness, honestly kick months. So don't keep your assets on deposit in a crypto exchange. Just in case their security processes blow a fuse and then they block you from accessing your assets for a significant period of time. This happens routinely and read it and Twitter are full of people complaining that their accounts have been blocked for weeks on end or months on end even, and that nobody replies to that image. So let's log into my account at kooky. Okay, here we are on cocaine, which you can find at KU coin.com. Could coin is an offshore centralized crypto exchanges registered in the Seychelles. And it has a huge variety of crypto pairs for you to trade. So I'm just gonna give you a quick walkthrough of what a centralized exchange looks like, and I'll do so using my coconut count. First of all, we need to login. Obviously I login using a username and password, as is traditional. First of all, I have to pass the robot test. I know it's asking me for my two FA, which I've got I have an application open offscreen which will give me the number I need. I paste that here and click Submit. Okay, so here we are in Miku kind of count. As you can see, I have almost no money in my account whatsoever because I do not keep assets in an exchange for any length of time. Now each exchange has a slightly different interface, but they all have roughly the same functionality. They will allow you to deposit funds. You can deposit funds via a bank account or credit card. Or you can deposit funds using cryptocurrency. The choice is up to you. Obviously, you do need to pass KYC when you open a new account. But in my case, that was something I did some time ago. Exchanges obviously also let you withdraw you can withdraw cryptocurrency where it will send the crypto from your account in Cook coin to your cryptocurrency wallet. You can withdraw feared currency to your bank account. Now keychain is quite a complex product. It has an awful lot of services. Let's look at the main service, the trading options. Now what you're looking at is a pretty common layout for a trading window in a centralized crypto exchange. Or for that matter, in a stock trading application or a foreign exchange trading application. I'm just going to enter my sixth digit trading password here to open up those options. The graph in front of us shows us the price movements for, in this case, Bitcoin against the US dollar. You can see up here in the top left-hand corner, the pair were trading in this window is BTC USD t. You SDT is Tether, It's a stablecoin. Using this pair, I can buy or sell Bitcoin for the tether stable coin. Effectively, for dollars using this option, I can choose other pairs. I could choose, for example, a theory in Bitcoin. So if I was to use this interface now, I would be buying and selling Bitcoin for a theorem, or buying and selling a theorem for Bitcoin, if you prefer. There are obviously hundreds of pairs available on coupon for you to try it. Every time we open, a new pair, can go and places it at the top of the screen here so we can move between different options very easily. When we get into the section on investing, I will explain in more detail how you execute the various different types of trade and what a lot of this information means. But just to give you some general background information, these square objects you're looking at on the screen are called candles, because they roughly resemble a candle. A red candle shows a downward movement in price over a period of time. And a green candles shows an upward movement in price over a period of time. And the period of time the chart is displayed for is configurable. So if you want to look at a chart where each candle represents one minute of time, you can, if you want to look at a chart where each candle represents one day of time, you can, it's completely up to you. And this is for a current, a cryptocurrency called Avi and USD t. Down here in the bottom right, we have our buy and sell options. If you wanted to, by Abby, you would use this box on the left. These options on the left. If you wanted to sell either you would use these options on the right. These specific types of trades you can do, limit trades, stop orders. Stop-loss is a short-term kids. I will explain in depth in this section on investing. I'm not gonna get into that right here. Here we have something called the order book. And this is basically all the open trades for this pair that could coin has on its books at this period of time. Everything in green is people trying to buy AVI, and everything in red is people trying to sell Ave. And the current trends are executing at 245.595 or each other is trading hands right now for about 222 years. Down here in the bottom, you see a summary of any open trades you might happen to have. Any open orders, stockholders, your order history, your trade history. And again, when we get into the section on investing, go into this in more detail. So if I wanted to purchase some other right now for USD T, I would come down here. I would execute something called the limit order, which means I set the exact price that I want to buy our V4. And again, I will explain limit orders in more depth in this section on investing, I'm going to choose a price of 244836. And let's say I wish to purchase ten Ave. And the interface now tells me that this trade is going to cost me $2448. I click Buy and a pop-up tells me that the maximum size of the order I can actually execute is 0. And that's because I don't have any money in this account at this point in time to cook kinds, obviously not going to let me make a trade. If I haven't got any funds on deposit. And again, if I wanted to sell RV, I just put the price here that I wish to sell. Choose the amount I wish to sell. And click cell. And there you go. That's a very quick and easy overview of a crypto exchange trading window. Main points to keep in mind are that when you trade your trading a pair, in this case Bitcoin for your SDT, or F for BTC, USD t, or any one of these pairs. The cook line offers you have buy and sell options. You can either choose a specific price to buy and sell it. That's called the limit order. Or you can just buy and sell at the current market price. That's called a market order. And again, we'll get into that in more depth in this section on investing. Trading windows look complicated and they do have a huge amount of functionality that the vast majority of users do not use the functionality that is aimed at professional traders. Our purposes, we don't need to use even a fraction of that functionality. So please don't be put off by the seemingly complex nature of this window. The basics are actually quite straightforward. And we'll get into those in the section on investing. And here's a quick list of the markets that coupon offers. Hundreds of different trading pairs. As you can see, if you have some feared currency or some cryptocurrency that you need to convert into a different crypto. Cocaine is an excellent choice to make. I don't get paid for telling you that. They don't give me any commission. Okay. So that's what a centralized crypto exchange looks like. In the section on investing, we will discuss the various different types of trades that you can make using a centralized exchange. We will make a few example trades just to show you how it works. And we will also discuss some strategies for buying and selling crypto. But for our purposes in this video for now, that's all we really need to get into. So I'm gonna come up here and log out of my account. There you go. That's just a very quick and easy overview of the functionality you can expect to find in a centralized crypto exchange. Okay, well that's the overview of centralized crypto exchanges. When we get to the lessons on investing, we will look in detail at the various types of trade that you could execute at these exchanges. But for now, we're going to move on to the next lesson. As always, reach out to me with any questions you may have or re-watch this video if anything is unclear or doesn't make sense. And when you're ready, I'll join you in the next lesson. As always. Thank you very much for your time. 25. Decentralised Crypto Exchanges: Hello and welcome back. Okay, now we're getting to the sexy stuff. Decentralized exchanges or taxes, as they're commonly referred to, are automated crypto exchanges. But they're not operated by companies in the way the Coinbase or BitStamp. Instead, the taxes are automated, smart contract based applications which live on a blockchain. Now, just like a centralised exchange, they let you exchange one cryptocurrency for another by choosing a trading pair just like you did on the centralised exchange. So why dex is different? Well, in a centralized exchange, you have to transfer your crypto is to that exchange in order to make your tread. When you trade on a decks, you send your crypto to their smart contract directly from your crypto wallet. And they send back the assets that you buy directly to your crypto wallet. Your crypto is are never on deposit with the third party in the way that they are with a centralized exchange. This is known as non-custodial trading. So you just connect your wallet to the decks and choose which kind you want to swap for another coin. Once the transfer is complete, the new coin will be present in your wallet. Usually a DEX will perform your transaction on the same network for the crypto is that you want to buy and sell. Well, what does that mean? Well, if you want to exchange oneth for 2 thousand die on the Ethereum network for example. You send the decks one ether on your theorem minute. And the deck send you back your 2 thousand die stable coins also on their theorem minute. Sometimes the decks will accept one type of cryptocurrency on one network and then deliver your chosen cryptocurrency back to you on a different network. Bonus points. If you can recall what this type of transfer is called from our lessons in section one. Yes, it's called an atomic swap. Unlike centralized exchanges, taxes cannot be hacked as they live on a blockchain. A lot they're not free from exploits, as we'll discuss in the next section. Also different decentralized exchanges. There is no KYC to perform an index because you don't have an account. Indexes do not accept feared currency. So you cannot send a bank transfer to index or withdrawal feared currency from one. You can only trade in crypto coins and tokens. Thing that dx is du of course, except stable coins, but they do not accept feared money, bank transfer or credit card payments or dex is safe to use? Well, most of them are, yes. Please do your own research on any decks you plan to use in order to see if it has a well-established trading history. New taxes are appearing all the time and not all of them will be trustworthy. It's quite possible that someday, if not already, someone has put a DAX online that is designed purely to steal money from its customers. When you go to a DAX, it will ask you to connect your crypto wallet. Generally it will accept the MetaMask wallet that we installed earlier. When you connect your wallet or the decks, your wallet needs to be connected to the same network as the decks operates on. You will usually be told if you need to change networks. Once connected, you choose the two cryptocurrencies you wish to exchange between. Enter the amount you wish to exchange, and press the swap those kinds. If you have enough network negative kinds in your wallet to pay for the transaction fees, then the transaction will take place. Decks is have a supply of crypto coins and tokens to sell to you. Because they use something called a liquidity pool. Liquidity pools or pools of crypto that are invested by people like you and me. Each trading pair on a decentralized exchange will have its own liquidity pool. This pool of assets is what's used to supply you with your chosen crypto when you make a trade. Let's say you want to trade some avalanche tokens for us DC stable coins. Your USB-C payment is deposited into the liquidity pool and the corresponding a VAX tokens that you just bought, a deducted from the pool and sent to your wallet. Liquidity pools exists to ensure that any reasonably sized trade can take place at anytime. So where does this liquidity come from? Well, it comes from investors, just like you and me. We can invest our crypto is into a liquidity pool and in return, we get a share of all the transaction fields. This is called liquidity mining or liquidity farming. The investor chooses a pool to invest in and then deposits are some of cryptocurrency. This invested liquidity is then used to fulfill transactions of users swapping one crypto for another. On the decks. We will discuss liquidity mining and a lot more detail in the section on investing later in the course. One thing to be aware of when using a DAX is the concept of slippage. Slippage is the difference between the price you expect to receive for your trade and the price you actually receive. You see the price you actually receive for your trade is a function of how much money is on both sides of the liquidity pool. So after every transaction, that ratio between the two assets changes and the price calculation fluctuate slightly. Slippage occurs when the proposed trade that a user wants to make is quite large in comparison to the amount of liquidity in the pool on the decks, slippage is expressed as a percentage. Traders should pay attention to the possible advertised slippage that may occur before swapping assets virus attacks. The good news is that on many indexes you can set the maximum amount of slippage you're prepared to accept for your trade. If the slippage percentage ends up being higher than the level you prepared to accept, then your trade will fail and your assets will not be exchanged. However, you will still pay the gas phase for that transaction. So it's important, particularly with a large trade, for you to check that you're going to receive the amount of crypto that you expect to and that you set the maximum slippage percentage so that in the worst-case scenario, you can only receive your expected amount minus that slippage percentage. Because of slippage, liquidity pool based taxes are seen as more useful for small, occasional traders than larger traders. You're trying to execute a huge trued or you plan to make many trades, then you may be better off doing so on a centralized exchange. Slippage and decks price calculations are a little complicated. So please don't worry if you didn't quite grasp that concept the first time round. It's a concept you will likely need to review a few times before it clicks. Okay, I hope this makes some sense. Again, it's actually all pretty straightforward. But I've thrown a lot of new concepts at you in this lesson. And I appreciate it a lot taken. The main points to remember when you use a DAX or to ensure it's a reputable exchange with an established trading history, a feud. Always double-check the price of your trade. The check you're getting, the amount of coins you expect to before you execute that trade. As usual, if anything is unclear, please re-watch this lesson or reach out to me on discord with your questions. Thanks for your time. And when you're ready, I'll see you in the next lesson. Bye bye. 26. Crypto Swaps & Bitcoin ATMs : Hello and welcome back. In this lesson, we can have a quick look at how you can swap one crypto for another using a crypto wallet. And we'll also have a quick look at crypto ATMs. So crypto wallet swaps. To be precise, this is a method of swapping, hence the name one cryptocurrency or token for another. The swap process is very similar to that of a decks, but you use functionality built into your crypto wallet to perform the swap. You simply select the swap option in your wallet if it's offered by that wallet. And then you choose the token you wish to swap, and the token you wish to receive. Meter max is one wallet which offers swaps, and there are many others. In general, what the wallet actually does is performed a deck street on your behalf. So you don't need to mess about going to DAX websites, settings, slippage levels, and making trades. You can just make a swap from within your own wallet. Please keep in mind if you do use a crypto wallets built-in swap functionality, the chances are that the fees you will pay will be quite a bit higher than a centralized or decentralized exchange. But it can be very quick, easy, and simple to do a wallet swap. Okay? What about Bitcoin ATMs? Well, an easy way to buy, and sometimes cell cryptocurrency is at a crypto ATM, also known as a Bitcoin ATM or a BAT M for short. You will find these machines in most large towns and cities. A Google Maps search for Bitcoin, ATMs will bring up a list of those machines closest geo-location. A crypto ATM is a machine that will accept cash from you and in return will transfer cryptocurrency to your crypto wallet. Generally, all these machines true Bitcoin, but most of them will also deal with a theorem and some of the other more popular cryptocurrencies. Regulations that crypto ATMs have to adhere to will of course be different in different legal jurisdictions. So depending on the regulations where you live, you may need to register with the ATM operator and provide some ID to open an account. Alternatively, you may be able to perform a completely anonymous transaction if the amount of money being traded falls below a specific limit. In order to use a crypto ATM, you will need to learn how to get the QR code that is associated with your wallet ID. A QR code, or quick response code functions in much the same way that a barcode Does. It can be quickly scanned by a camera and transfer information to be used by a computer program. If you've eaten at a restaurant during the COVID epidemic, then you may well have had to scan a QR code with your mobile phone to access the restaurant's menu online. So I'm sure QR codes will be familiar to many of you. As an example, if you want to see the QR code associated with your MetaMask a theorem account. Then open your MetaMask wallet. Click the three dots to the right of your account name and wallet address and choose the account details option. You should now see something like this displayed on the screen. The purchase cryptocurrency from a crypto ATM, you will need to have a copy of your wallets QR code for the machine to scan. If you use a crypto wallet on your smartphone, then it's easy to get your QR code when you need it. If you use wallet software on your computer, then you may need to take a photo of your wallet QR code to scan when you add the crypto ATM. Now following is a general overview of how you can buy and sell cryptocurrency with a crypto ATM. But as there are multiple models of ATM in the market, then these processes may differ from machine to machine. In order to buy crypto. For crypto ATM, the general process will be that you select the cryptocurrency you want to buy from the ATMs touchscreen menu. Enter your cash into the bill acceptor of the ATM. Scan your wallet QR code, confirm the transaction details, and then wait for the ATM software to send your crypto via the blockchain. Remember if you're buying Bitcoin, it can take up to 30 minutes for that transaction to complete. Some crypto ATMs, but not all, will also allow you to sell your cryptocurrency and receive cash back directly from the machine. In this case, the general process will be that you transfer the cryptocurrency you want to sell to the machines wallet. The machine will tell you what wallet address to use. You will then receive a transaction code or a printed receipt from the machine with a QR code. You wait for your transaction to complete on the blockchain. Then you enter your transaction code or scan the receipt given to you into the ATM, or even another ATM operated by the same ATM operator. You don't necessarily have to go back to the same ATM machine all the time. To receive your cash. Generally the price you will pay or receive for cryptocurrency at a crypto ATM is not as good as the price you will get from a crypto exchange. Atm operators generally charge anywhere from five per cent of 15% of the sum you're treating as a fee. It's just the same as a foreign exchange desk at an airport. The price you end up getting is not the true market price. It's the market price with a margin added onto it. Now let's have a quick discussion about Bitcoin, ATMs, scams, and security. You should practice the same basic safety steps when using a crypto ATM as you do when using a regular bank ATM, please make sure you're in a safe location and there's nobody suspicious in your immediate vicinity. Let's have a little test because I recently saw an interesting article about a crypto ATM scam. And I'd like to bounce it off you and test your awareness. Let's assume that you want to sell some Bitcoin to the ATM and receive cash back in return. You arrive at the ATM and see that there's a professionally made sign with the ATM operators logo and contact information on the ATM, all located close to it. And the sign says, due to a temporary technical issue, please transfer your Bitcoins to the Bitcoin address printed below, and not to the Bitcoin wallet address given to you by our ATM itself. You will receive your cash payout once the transfer has completed on the blockchain. If you have any questions, please give us a call at this number. Please take a minute and think about this situation and consider what you should do. Pause the video right now and think if you should continue with this transaction. Okay. If you believe that you should not transfer Bitcoin to the address on the sign, then you would be absolutely correct. This very low-tech, easy to execute scam has been seen recently in multiple locations where Bitcoin ATMs operated. Now, if you consider calling the ATM operated, ask their advice on what to do, then that's a good idea. However, please do not use the contact information on the sign itself. As you may find yourself talking directly with the scammers and not the idiom operator. Should you have any doubts when using a crypto atm, then make a Google search for the contact details of the ATM operator and contact them directly with your questions. Don't use the number on the machine. Once again, don't live in terror of such things happening. This gamma attempts are actually quite easy to detect and protect yourself against with a little common sense and by taking some simple precautions, well, okay, that's it for this lesson. As usual, if anything is unclear, please re-watch this lesson or reach out to me on discord with your questions. Thanks for your time. And when you're ready, I'll see you in the next lesson. 27. Peer to Peer Crypto Trading: Hello and welcome back. Let's discuss peer-to-peer crypto cells and why you should probably avoid this option for now. There are a number of websites online such as Pax fool.com and local crypto.com, which act as an intermediary to help you find another private individual to buy your cryptocurrency or one that will sell cryptocurrency to you. These P2P exchanges, as they sometimes call themselves, then take a fee for putting you in touch with the other person. They may also offer some form of escrow service to safeguard the cryptocurrency being bought or sold. I strongly recommend that until you have a lot of experience with purchasing and selling cryptocurrency that you avoid the peer-to-peer cryptocurrency market. These sites are havens for scammers who exploit legitimate customers. Either you will receive a fraudulent bank wire payment for the crypto yourself or you will not receive the correct crypto that you've purchased. The list of techniques that scammers used to defraud people on P2P crypto sites is very long indeed. And you'll often find them using hacked bank accounts or stolen credit card numbers. As I just said, I strongly recommend you do not use P2P crypto websites. At least, not just yet. I personally avoid them as there are much easier ways to buy and sell cryptocurrency if you do see too good to be true once in a lifetime price for crypto on one of those sites, probably being sold at a stupid low price as the seller is in some kind of emergency and needs your money. Now, then guess what? It really is too good to be true and will almost certainly be a scan. So in conclusion, in general, you're going to get the best prices from a reputable Crypto exchange. One final note, and this is more about exchanges than P2P sites. Please never use the Russian Crypto exchange yogurt. I can say without fear of any legal repercussions, that those people are thieves. The fact that some of the worst thieves in crypto, and they're not going to assume E for making this claim. I assure you. When we get to the section about scams, I'll tell you my story about Ubud and how they scammed me for crypto coins that today would be worth around $40 thousand. But for now, if you see your robot's name pop up anywhere, please just avoid them. Okay, well, we've covered a lot of ground in this section. If anything is unclear to you, then you can always go back to those lessons and re-watch them. I strongly advise you to do this anyway, as the lessons will make a lot more sense to you the second time you view them. But for now, thank you so much for your time. I hope you're enjoying the course so far. I remember. If you have any questions, please reach out to me. I'll get back to you as quickly as I can. For now. That's the end of this lesson. And when you're ready, I'll see you in the next lesson where we round up this section. 28. Course Ending: Hi, welcome back and congratulations on getting this far in the course. You've made it through a long section of the course and we've covered a lot of material. Please do not worry if you didn't grasp every piece of information in this section. We really did cover a lot of ground. You have lifetime access to this course so you can review and re-review any material at anytime you need. These concepts are all pretty straightforward, but there are an awful lot of them for you to take on board at the start of your crypto journey. So please think of this course as a reference that you can come back to as needed to refresh your memory and fill in the gaps of your understanding. As you progress more and more into the world of cryptocurrency, you also have access to the Discord server that accompanies this course, which is the best place to ask questions. You can reach me most days during European working hours. And if I'm not online, all of your other students are. So you can chat with them or search through that past questions to see if somebody else has asked the same question is you and found an answer. Plus, please feel free to just hang out in the Discord server and chat with me and the other students about all things crypto. That's what it's there for. Well, once again, well done on getting this far. You're learning a lot. And I hope you find the cryptocurrency space is testing and as exciting as I do. When you are ready, please meet me in the next section. Until then. As always, thank you very much for your time.