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Cryptocurrency? VA Foundation Guide for Beginners

Want to get acquainted with cryptocurrency, but don't know where to start? You have found a detailed guide for beginners, created by experts at the VA Foundation. We'll simplify the basics of cryptography using simple language for you to understand. Our coverage covers its definition, how it works, the different types of coins, and basic terminology.

As you scroll down, you will find a lot of useful information that will help you understand the basics of the cryptocurrency market and assets.

Let's start from the beginning and answer the question: what is cryptocurrency? Continue reading to understand the main aspects of her work. Once you've got the basics down, dive into the top cryptocurrencies section to get more information about the coins that pique your curiosity.

Cryptocurrency Fundamentals

Understanding the ins and outs of crypto can be quite overwhelming. Here at VA Foundation, our objective is to provide you with a robust yet easily understandable overview, avoiding overwhelming you with an onslaught of intricate details all at once. Think of it as your introductory crash course into the world of cryptocurrency!

What is Cryptocurrency?

In easy-to-understand terms, cryptocurrency refers to digital currency that people can use to purchase goods and services. It relies on advanced coding techniques known as cryptography to secure transactions and generate new units. The key difference is that cryptocurrency is not controlled by any government or central bank.

The pioneer cryptocurrency, Bitcoin, was introduced in 2008 by the mysterious figure known as Satoshi Nakamoto, setting the stage for what was to follow.

In 2015, Ethereum emerged as a more adaptable platform for decentralized applications and smart contracts. Since then, the cryptocurrency landscape has expanded rapidly, giving rise to thousands of coins and tokens - some of which may carry risks or lack credibility, while others showcase innovation and reliability.

Blockchain

Blockchain acts as the foundational technology behind the majority of cryptocurrencies. It operates as a decentralized digital ledger that systematically logs transactions across a network of computers. This decentralized framework ensures transparency, security, and immutability because no single entity has the ability to modify the public record of transactions.

Smart Contracts

Smart contracts are essentially programs embedded within blockchains that autonomously execute agreements between parties, relying on code instead of trust. For instance, a smart contract could automatically transfer cryptocurrency to another party once the predefined conditions outlined in the contract are fulfilled.

Decentralization

Децентрализация означает отсутствие центрального органа, управляющего валютой. В отличие от традиционных денег, где правительства и центральные банки регулируют предложение и денежно-кредитную политику, криптовалюта работает автономно без централизованного стороннего надзора. Это дает пользователям повышенную финансовую независимость и контроль над своими активами.

Wallets

Cryptocurrencies are stored in digital wallets, which come in various forms such as web-based, mobile, hardware (USB), paper (printouts), or desktop software. These wallets hold public addresses for receiving cryptocurrency and private keys necessary for sending it.

Exchanges

Exchanges serve as platforms where individuals can purchase, sell, and trade cryptocurrencies. They facilitate entry into the crypto sphere by enabling the conversion of traditional currencies into digital assets. Additionally, exchanges offer technical tools tailored for experienced traders. It's crucial to conduct thorough research when selecting an exchange, as their security measures and compliance with regulations may vary.

Cryptocurrency Transactions

Transactions are documented on the public blockchain ledger, which is openly accessible, although the identities of the parties involved are encrypted. Some cryptocurrencies place a higher emphasis on anonymity compared to others. Moreover, there exist privacy-enhancing protocols aimed at bolstering confidentiality. Although transactions are transparent, the link to real-world identities can still be partially concealed.

Supported crypto

The VA Foundation supports a variety of coins, providing its users with flexible and efficient digital asset management for cryptocurrency-backed loans. On our platform you can find popular and reliable cryptocurrencies, each with unique characteristics and benefits that allow you to get the most out of your digital assets.

We strive to offer the best cryptocurrency experience, providing high liquidity, competitive fees and a user-friendly interface for all your transactions.

Click below on the cryptocurrencies you want to explore further to discover detailed background information for each one.

Types of Cryptocurrency

By breaking cryptocurrencies into categories based on their purpose, the different coins become less overwhelming and easier to digest. You can focus on the coins that you find most valuable as an investor or user.

Knowing the category context also gives you a good understanding of how new projects fit into the broader crypto ecosystem. By grasping the difference between what different tokens do, you'll gain perspective on the sheer diversity of innovations that blockchain technology has to offer.

Layer 1 Cryptocurrencies

Layer 1s create the foundation which other crypto projects build upon. They make up the base layer for other apps and coins in the ecosystem to operate on.

Examples: Bitcoin (BTC), Ethereum (ETH)

Layer 2 Cryptocurrencies

These are built on top of the Layer 1 blockchains mentioned above to upgrade scalability and efficiency, and they'll often solve problems like high fees or slow transactions.

Examples: Bitcoin (BTC), Ethereum (ETH)

DeFi Cryptocurrencies

Using DeFi (decentralized finance), crypto lending, borrowing, trading, and transacting peer-to-peer is made possible using blockchain-based smart contracts.

Examples: Uniswap (UNI), Aave (AAVE)

Gaming Cryptocurrencies

Gaming cryptocurrencies are used in blockchain-based games and metaverse virtual worlds. They power features like in-game transactions, rewards systems, governance voting, and NFT and token integration.

Examples: Axie Infinity (AXS), The Sandbox (SAND)

Exchange Tokens

Exchange tokens are the native cryptocurrencies of crypto exchanges used for various exchange-specific activities.

Examples: Binance Coin (BNB), Huobi Token (HT)

Meme Coins

Meme cryptocurrencies started as coins created for fun or as a joke, often based on an internet meme or viral trend. However, some have grown into valuable projects with engaged communities.

Examples: Dogecoin (DOGE), Shiba Inu (SHIB)

Stablecoins

As their name suggests, stablecoins were created to maintain a stable value. For example, the two biggest stablecoins are pegged 1:1 with the US dollar.

Examples: Tether (USDT), USD Coin (USDC)

Yield Farming Tokens

An offshoot of DeFi that gives users the opportunity to earn rewards through lending or staking their assets.

Examples: Yearn.finance (YFI), PancakeSwap (CAKE)

Cross-Chain Tokens

Cross-chain tokens are cryptocurrencies that allow interoperability between different blockchains. By removing silos, tokens, and data can flow with ease between the other chains.

Examples: Polkadot (DOT), Cosmos (ATOM)

Governance Tokens

Grant holders voting rights in decentralized protocols, influencing the development and changes in the network.

Examples: Maker (MKR), Compound (COMP)

Privacy Tokens

Unlike transparent blockchains like Bitcoin, privacy coins limit visibility. There are two sides to the coin for privacy tokens - they remain controversial due to perceived potential for illicit usage but also uphold ideals of financial autonomy and censorship resistance.

Examples: Monero (XMR), Dash (Dash)

Putting Knowledge Into Practice With VA Foundation

Now that you've grasped the basics of cryptocurrencies and their different kinds, it's time to apply this understanding practically. This is where the VA Foundation steps in.

The VA Foundation stands out as a premier fintech platform dedicated to cryptocurrency lending. Our suite of top-notch crypto services encompasses crypto loans and interest-generating accounts. To optimize your cryptocurrency assets, we furnish tools for comprehensive asset management. Delve into our user-friendly platform featuring competitive rates and round-the-clock customer support to navigate your cryptocurrency holdings with assurance.