Cryptocurrency in 15 minutes

Practical and short introduction to cryptocurrency

Takes only 15 minutes of your time. No blockchain description, no in-depth tech details, no NFTs (only FTs), no crap. Just all the essentials and words you need to know for practical usage.

Basics

There are two major types of cryptocurrency:

• Regular coins:
  • not backed by a real-world assets
  • volatile to standard (fiat) currencies (such as USD)
• Stablecoins:
  • backed by different real-world assets in a way to keep the price constant
  • 1 stablecoin = 1 USD (other currencies exist too)

Regular coins are Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Monero (XMR)
Stablecoins are Tether (USDT), Ciscle’s USDC, Binance USD (BUSD), PayPal USD (PYUSD)

There are thousands of coins out there, we’ll focus only on a several major ones, which are commonly accepted by the merchants.

Regular coins (the Coin itself) are decentralized, not owned by a company or any single entity. They could be received by anyone from the network itself via mining process (proof-of-work), staking (proof-of-stake). Could not be manually controlled: once you have the coins, nobody could block it from you.

Stablecoins are centralize-owned by a company (USDT is owned by Tether Limited), and are issued under the control of the company. Stablecoins could be manually controlled: the code often includes address blacklist feature, which allows the company to execute legal cryptocurrency asset seizure.

Hint

You can get the list of a major cryptocurrencies at CoinMarketCap

Networks (Blockchains)

Regular coins are running on their own blockchains (networks), where each store only their own transactions.

But some regular coins have so advanced blockchain that they allow another coins to run on top of them.
That’s how stablecoins are implemented: they don’t have their own (native) blockchain, but are reusing the advanced blockchain of other coins, usually several of them simultaneously.

That’s why if you want to transfer stablecoins, you’re told to do that in exact blockchain network.

• USDT @ Ethereum (ETH, or ERC-20) means transaction of Tether USDT in Ethereum network (using ERC-20 specification)
• USDT @ TRON (TRX, or TRC-20) means the same in Tron network (using TRC-20 specification)

If you have USDT on Ethereum, you can’t transfer it to USDT on Tron. You need to exchange your USDT @ ERC-20 to USDT @ TRC-20 in the exchanger first.

Transfers Are Public Data

Blockchain data is public: all your transactions in both regular coins and stablecoin are visible, as well as your balances.

The exception are privacy-oriented coins: Monero, ZCash (and others), which hide transactions and balances. Governments don’t like them, as well as major centralized exchanges.
There’s no stablecoins on top of privacy-oriented networks.

Hint

You can explore the state and data of the major blockchains at BlockChair, Mempool.space for Bitcoin, Etherscan for Ethereum, Tronscan for TRON

Fees & Time

Stablecoins are tokens, implemented as smart contract code. To execute transfer command and send your stablecoins to elsewhere, you need to pay fee in a native blockchain coin.
For USDT @ ERC-20, you need some Ethereums to transfer USDTs. Same for Tron.
If you give somebody your fresh Ethereum address with zero transactions and they send you stablecoin, you won’t be able to transfer it without topping-up the address with ETH first.

Some networks have negligible fees, some have substantial and/or volatile (but have ways to reduce it). Fee could be manually controlled per transaction, lower fees reduce transaction priority, which might affect transaction speed.

Hint

• USDT fees could be checked at gasfeesnow.com
• Regular coin fees are visible at blockchair.com
• Best resource for Bitcoin is mempool.space
• Historical data is available at bitinfocharts.com

Wallets

The applications I use.
All are non-custodial a.k.a self-custodial: you own the private key, you own the money. There’s no (central) service.

• Bitcoin: Electrum (Windows, Linux, macOS, Android)
• Bitcoin Cash: Electon Cash (Windows, Linux, macOS, Android, iOS)
• Litecoin: Electrum LTC (Windows, Linux, macOS)
• Monero: Feather (Windows, Linux, macOS)

For all the stablecoins and most of “advanced” networks you’ll need a browser-based application, usually a browser extension or Electron application.

• Ethereum: Enkrypt
• Tron: Tronlink (Android, iOS, Chrome/Edge browser extension)

Note

Some of multi-coin wallets earn money by including their fee in your transactions. I recommend avoiding them. There are none of these in the list.

Electrum (Bitcoin)

Electrum, Electron and Feather have very similar user interface.
Let’s use Electrum (Bitcoin BTC client) as an example.

Create standard wallet. Other types are advanced and out of scope of this tutorial.

Create a new seed.

Seed phrase (or mnemonic phrase) is a cornerstone of the access to your wallet, and should be held private at all times.
Seed is a master key to all of your addresses (a master key of all the private keys), with which you can restore your wallet if you lose the wallet file, or forget the password for the file.

Don’t reveal your seed, don’t send it to anyone. This screenshot is only for the demonstration purposes.

The main interface consists of the following tabs:

• History: transaction history on all of your addresses, with the description if you set one
  • description is visible only to you, it is not transferred over the network
• Send: transfer money to another address (wallet, user)
  • you can add transaction description, it would be shown in your history
  • single transaction can transfer to many addresses
• Receive: create transaction request
  • selects random empty unused address from your wallet, for anonymization purposes
  • generates URI or QR code with the address and payment amount
  • sets description of the transaction
• Addresses: lists the addresses in your wallet, generated from your seed
  • use this tab only if you want to provide permanent address somewhere, for example to collect donations on your webpage
  • each address could also be labeled, just as transactions
  • for regular transfers prefer receive tab

Please don’t use the Channels tab: it is for Lightning Network, which is out of scope of this tutorial.

Receive

In the receive tab, you can create payment request for the other person, and send them the URI (link), which includes:

• Address
• Amount
• Description
  • Description is not sent to the blockchain, just included in the URI. It is optional.

Use the “regular” Bitcoin onchain (on the blockchain), not the Lightning network (which requires special handling and is out of scope of this tutorial)

The generated link is on the right. With the QR code button you can generate QR code as well.

Only address (not the whole URI) could be copied by right-clicking on the request inside requests field.

Send

Let’s take a look at send tab.

Once you paste the address you want to send cryptocurrency to, set the amount, and press Pay button, the following window appears.

Here you can see and set the fee which would be used for this transaction.

There are two fee calculating algorithms based on market conditions:

• ETA
• Mempool

Use either of them, keep the slider in center. That will ensure that your transaction is processed in the reasonable time.

If your goal is to send coins with the minimal fees (e.g. donation), check the Low Priority information on mempool.space and don’t go lower than that.
The transaction could take up to 2 days to process.

Hint

You can read more on the fee estimation algorithm here

To save on fees and (mainly) on processing time, you can send to many addresses in a single transaction.

To do that, check the pay to many option and write the address,amount in Pay To field, each on each line.

Note

If your PC is infected with stealer or keylogger malware, the attacker knows your seed phrase and controls your wallet.
Hardware wallets keep secret data inside separate device, allowing to use cryptowallets even in untrusted environment.

Exchangers

Exchange between different cryptocurrencies and blockchains:

• SimpleSwap
• ChangeNow
• Gasfeesnow.com/swap
• Trocador

TODO more

Q & A

Which coin / blockchain / network is better?

If you want to pay for the digital goods or services which accept cryptocurrency payments, either Bitcoin or Ethereum are considered the universal standard and accepted everywhere.
Bitcoin Cash and Litecoin are also usually accepted, and have lower fees and transaction times.

For stablecoins, your best bet is USDT on Ethereum or TRON for non-EU citizens, USDC for EU citizens.
Tether USDT is delisted on exchangers for European users due to Markets in Crypto-Assets Regulation (MiCA) decision.

Can I test the software without spending real money?

Yes, you can use testnets of the networks, and ask for testnet Bitcoins (or other currency) on the testnet faucets.
One of these is Bitcoin Testnet Faucet (and another one), which allows you to request 0.0001 testnet BTC every 24 hours.
Run Electrum with --testnet argument to connect to testnet.

Hint

Use different wallets (files, seed phrases) for testnet to prevent accidents

How can I accept donations in cryptocurrency?

The simplest method is to just publish one of your addresses on your website, blog, youtube channel.
Take a look at archive.org donation page

Hint

Archive.org does not state the network for USDT and USDC, expecting these stablecoins on any blockchain (Ethereum is their main I guess).

Some software, such as Electrum, support OpenAlias, a simple DNS TXT record which allows to “pay to the website domain”.