Frequently Asked Questions
Here are a few questions we get the most. If you don’t see what’s on your mind, reach out to us anytime. You can also join the Candid Crypto Discord to talk to the Candid Crypto team and community!
Cryptocurrency is digital money, which the internet made possible. Cryptocurrencies are different than other forms of traditional digital cash because it is not controlled by a single company, bank or government. Cryptocurrencies are controlled by a distributed community that anyone with internet connection can participate in. These online currencies transcend national boarders and can not be manipulated by third party intermediaries like banks, credit card companies, and other financial institutions.
In almost every case, a cryptocurrency is powered by a distributed, public ledger known as a blockchain.
A blockchain is a list of transactions, split into blocks. A blockchain is a way to reach consensus in a trust-less way.
- Bitcoin’s ambition was to eliminate the need for a trusted third party to mediate transactions.
- The first blockchain is described in the Bitcoin whitepaper. The word blockchain is never actually used.
No, Bitcoin is not a stock or company that you can invest in! Bitcoin is fundamentally different than any corporation because it is not controlled by a centralized organization. There is no CEO making decisions on behalf of Bitcoin because it is controlled by the global community of people that use it. Anyone with an internet connection can transfer cash or other currencies into Bitcoin. However, Bitcoin is different than other traditional currencies. There is a limited amount of Bitcoin (21 million), and all transactions are recorded on the public blockchain. For more information, check out our “What is Bitcoin?” podcast episode and other resources.
Bitcoin was the first cryptocurrency, and thousands of other currencies are referred to as alternative coins (aka AltCoins). Bitcoin was the first use case of blockchain technology, but other developers thought there were better ways to use blockchain technology. Ether built on the Ethereum blockchain is a notable cryptocurrency, but there are thousands of others. Many of these altcoins focus on improving certain characteristics like transaction speed and privacy.
- A wallet is a private key that allows the holder to spend the funds in the wallet.
- Wallets are software applications that allow users to send and receive cryptocurrency.
- Candid Crypto recommends using a cold-storage wallet as much as possible. Trezor and Ledger are two of the most popular cold-storage wallets.
- Metamask is a convenient and easier wallet to work with, but the private key is generated on your machine.
- Liam’s opinion: I don’t recommend using a wallet like metamask to safekeep your funds. Scammers have an easier time accessing these funds, and if your machine is compromised the funds could be instantly extracted by an adversary.
Everything on the blockchain is pseudo-anonymous. You are not forced to present your identity to create a wallet or accept funds. Transactions are tied to arbitrary addresses that inherently do not reveal information about you.
In the United States, the process of converting cryptocurrency to fiat (and vice versa) requires the individual to submit KYC (know your customer) information. This information includes presenting your government ID and your social security number. None of the KYC information is made public, but you do have to trust the exchange will not leak your PII.
- Liam’s opinion: The original intent of such legislation was to “prevent money laundering” by criminals and terrorist organizations following the 9/11 attacks. An unfortunate result of these outdated compliance requirements places the burden of information security (ie, keeping your SSN and ID safe from malicious actors) on the business itself.
No. All transactions on the Bitcoin blockchain are irreversible and immutable by design. This feature allows users to have complete control of their money. Bitcoin allows you to be your own bank, which comes wih a lot of responsibility. You must be careful where you send your Bitcoin, and always double-check the address you’re sending it to!
There is no correct answer to this question, and it depends on your needs. There are advantages and disadvantages to software and hardware wallets. These wallets are also referred to as hot (software) and cold (hardware) storage wallets. If you want a top of line security and ease of use, hardware wallets like the Trezor and Ledger Nano S are probably your best options. These wallets come at a cost, but we recommend them if you are storing a significant amount of crypto.
Check out episode 10 of Candid Crypto to learn more about crypto wallets.
What gives anything value? Items are valuable when there is a high demand for them, and often these items are scarce.
- For example, gold and diamonds wouldn’t be valuable if they were easily accessible and had an unlimited supply.
Bitcoin and other cryptocurrencies often require a significant amount of computational power and energy to create, which increases their value. In addition, certain cryptocurrencies like Bitcoin have limited supply and lots of demand. All of these factors have made cryptocurrencies valuable over the past few years.
Candid Crypto was not created to be a cash cow. We originally create the podcast so we could learn and explore the world of crypto in a fun and approachable way. It’s been an incredibly rewarding process and we have just scratched the surface of crypto/web3. Up to this point, we have stayed away from sponsors for the benefit of our users. With that being said, there are expenses associated with Candid Crypto and sponsors might be added so we can continue to create content for the Candid Crypto community. Besides future podcast sponsors, passionate listeners can always donate whatever they can to keep us operating.
In addition, Candid Crypto is partially funded through affiliation with high quality Cryptocurrency products and services, such as exchanges and services. When you use links in our pages and reviews, sometimes we earn a commission. We promise to never share products and services that we wouldn’t use ourselves. Overall, It helps us keep producing the best quality content!