Crypto wallets, mining, and staking for beginners

A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchains. This allows users to send and receive digital currency and monitor their balance. If you own cryptocurrency, a wallet is essential for storing and managing your digital assets. You need at least one crypto wallet such as Coinbase, Binance, and Crypto.com. Most people prefer crypto self-custody wallets. You also need a VPN such as Super VPN to access it.

Self-hosted wallets

A self-custody wallet, such as the Coinbase Wallet, puts you in complete control of your crypto, effectively making you your own bank. Non-custodial wallets don’t rely on a third party — or a “custodian” — to keep your crypto safe such as Coinbase and Trustwallet.

While they provide the software necessary to store your crypto, the responsibility for remembering and safeguarding your password falls entirely on you. If you lose or forget your password — often referred to as a “private key” or “seed phrase” — there’s no way to access your crypto. And if someone else discovers your private key, they’ll get full access to your assets. 

A self-custody wallet, also known as a “self-hosted” or “non-custodial” wallet, is a cryptocurrency wallet that is under the sole control of the user. With a self-custody wallet, the user is responsible for managing their own private keys and keeping them secure.

There are several types of self-custody wallets, including software wallets that can be downloaded to a user’s computer or mobile device, and hardware wallets that are physical devices designed specifically for securely storing cryptocurrency.

Self-custody wallets offer users enhanced control and security over their funds, as they do not need to rely on a third party provider to manage their private keys. However, self-custody also comes with additional responsibility, as users are solely responsible for the security of their private keys and the safekeeping of their funds. It is critical for users of self-custody wallets to take steps to protect their private keys and keep their wallet software up to date with the latest security updates.

Hosted wallet

A hosted cryptocurrency wallet, also known as a “web wallet”, is a wallet that is hosted by a third party provider and accessed through a web browser. Hosted wallets are convenient because they allow users to access their wallet from any device with an internet connection. In addition, they generally do not require the user to download any software or manage their own private keys.

However, because hosted wallets are managed by a third party, they may not offer the same level of security as a self-hosted wallet. If the third party provider experiences a security breach or goes out of business, users may lose access to their funds. In addition, users of hosted wallets may not have full control over their private keys, which means they may not have complete control over their funds.

For these reasons, it’s critical for users of hosted wallets to carefully research the reputation and security measures of the provider. This is because they will be storing significant amounts of cryptocurrency in a hosted wallet. It may also be a smart idea to store only a small amount of cryptocurrency in a hosted wallet and keep the majority of funds in a more secure, self-hosted wallet.

How to set up a hosted wallet:

  1. Download a crypto wallet and install the app. Popular options include Coinbase, Binance, and Crypto.com. Hosted wallets usually offer staking, farming, and other benefits like giveaways or airdrops or NFT.

  2. Create an account. Unlike a hosted wallet, you don’t need to share any personal info to create a non-custodial wallet. Not even an email address. But this one is hosted wallet so prepare your driver licence or ID card.

  3. Be sure to write down your private key. It’s presented as a random 12-word phrase. Keep it in a secure location. If you lose or forget this 12-word phrase you won’t be able to access your crypto.

  4. Transfer crypto to your wallet. Probably the most efficient way to earn crypto for beginners is by free mining it. Then transfer your crypto to your wallet.

In many ways, a cryptocurrency wallet can be thought of as your own personal bank account for digital assets. Just like a bank account, it is wise to take care of your wallet and keep it secure. If someone gains access to your wallet, they may be able to steal your funds or make unauthorized transactions.

There are several ways to protect your wallet and ensure the security of your funds:

  1. Use strong, unique passwords for your wallet and enable any additional security measures, such as two-factor authentication, that are available.

  2. Avoid sharing your private keys with anyone and store them in a secure location.

  3. Keep your wallet software up to date with the latest security updates.

By taking these precautions, you can help protect your cryptocurrency assets and ensure the security of your wallet.

Crypto Mining

Cryptocurrency mining is the process of verifying and adding transactions to the public ledger also known as the “blockchain” of a cryptocurrency. This process helps to secure the blockchain and allows new units of cryptocurrency to be created.

The first cryptocurrency mining occurred when the first block of Bitcoin (the “genesis block”) was mined in 2009. Bitcoin was the first decentralized cryptocurrency, and its blockchain was designed to be secured through a process called mining. In the Bitcoin network, mining involves using specialized hardware to solve complex mathematical problems.

Miners use specialized hardware and software to solve complex mathematical problems, and in return, they are awarded a certain number of units of cryptocurrency. The process of mining is an essential part of the maintenance and security of many cryptocurrency networks, and it can be a lucrative way for individuals to earn income.

The first miner to solve the problem is rewarded with a certain number of bitcoins. Since the inception of Bitcoin, many other cryptocurrencies have been created and their networks also rely on mining for security and new unit creation.

Crypto staking

Cryptocurrency stake is a process by which holders of a specific cryptocurrency can earn rewards for holding and supporting the network. Staking involves holding a certain amount of cryptocurrency in a “staking wallet” and participating in the maintenance and security of the network by validating transactions. In return, stakers are typically rewarded with a share of the transaction fees and/or new units of the cryptocurrency.

Not all cryptocurrencies support staking, and the specific requirements and rewards for staking can vary widely between different cryptocurrencies. Some cryptocurrencies require stakers to have a minimum amount of the cryptocurrency in order to participate, while others may have more complex rules for staking and reward distribution.

Staking can be a way for holders of a cryptocurrency to earn passive income. This is because they can earn rewards simply by holding and supporting the network, rather than actively mining. However, it’s wise to thoroughly research the specific requirements and risks of staking a particular cryptocurrency before participating.

Crypto farming

“Farming” in the context of cryptocurrency generally refers to the process of earning rewards for providing liquidity to a decentralized finance (DeFi) protocol. DeFi protocols are built on blockchain technology and offer financial services such as lending, borrowing, and trading, often in a decentralized and open manner.

In DeFi farming, users can earn rewards by providing liquidity to a DeFi protocol by holding a certain amount of cryptocurrency in a special type of smart contract called a “liquidity pool”. The liquidity pool allows users to trade cryptocurrency for other assets, and the fees generated from these trades are used to reward farmers.

Farming in DeFi can be a way for users to earn a passive income by providing liquidity to the protocol. But it also carries inherent risks, such as the risk of the value of cryptocurrencies fluctuating or the risk of technical issues or hacks. As with any investment, it’s critical to thoroughly research the specific risks and requirements of DeFi farming before participating.

The difference between farming and staking

Farming and staking are similar in that they both involve holding a cryptocurrency and participating in the maintenance and security of a network in order to earn rewards.

However, there are some key differences between the two:

  1. Staking typically refers to the process of earning rewards for holding and supporting the network of a proof-of-stake (PoS) cryptocurrency. In PoS systems, the blockchain is secured by a group of “validators” who hold and stake a certain amount of the cryptocurrency, and they are typically rewarded with a share of the transaction fees and/or new units of the cryptocurrency for their efforts.

  2. Farming, on the other hand, generally refers to the process of earning rewards by providing liquidity to a decentralized finance (DeFi) protocol. In DeFi farming, users hold a certain amount of cryptocurrency in a special type of smart contract called a “liquidity pool”, which allows users to trade the cryptocurrency for other assets. The fees generated by these trades are used to reward farmers.

  3. Another key difference is that staking is usually only available for PoS cryptocurrencies. On the other hand, farming can be done using any cryptocurrency that is supported by a DeFi protocol.

It’s crucial to note that both staking and farming involve inherent risks, and it’s critical to thoroughly research the specific risks and requirements of each before participating.

Conclusion

So as a beginner you should find the right way to earn some crypto for free. Find any crypto that focuses on creating the first block of the blockchain or the “genesis block” such as Pi Network as the article is written.

There are several benefits that the first adopters of cryptocurrency mining may have had:

  1. Early adopters may have been able to mine cryptocurrency using relatively simple and inexpensive hardware, as the difficulty of mining was much lower in the early days of cryptocurrency.

  2. The value of many cryptocurrencies has increased significantly over time, so early adopters who mined and held onto their cryptocurrency may have seen a significant return on their investment.

  3. As the first adopters of cryptocurrency mining, early miners may have had the opportunity to play a key role in the development and growth of the cryptocurrency ecosystem.

  4. Some early adopters of cryptocurrency mining may have been able to benefit from the network effect. This is because the value of a cryptocurrency can often be directly linked to the number of people using it. Consequently, the more people who use it, the more valuable that crypto will be.

  5. When you already have some crypto in your crypto wallet, consider at least staking it. By doing this, you will see even a small amount of money working for you. You won’t have to work for money anymore when you earn a lot of it, at least that’s the idea.

A wise beginner does not buy, but mines it for free. Mine Pi Network is one of the most popular options available today. Current value of One Pi network may be worth around 100 dollars. Another free crypto mining websites such as Pipeflare, Getzen, Globalhive, Remint use code GS8OZR2C to get bonus, Fone use code rdek2qxt to get bonus, Timestope, and Onus for beginners.

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Michael Sega Gumelar

michael.sega.gumelar@gmail.com

michael.sega.gumelar@bibliopedia.id

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