Bitcoin: Digital Gold
Created by the pseudonymous Satoshi Nakamoto in 2009, Bitcoin has a hard supply cap of 21 million coins. This programmed scarcity underpins its reputation as "digital gold".
Bitcoin's security rests on a decentralised blockchain maintained by miners who verify transactions using Proof-of-Work. Every ~4 years a "halving" cuts the block reward in half, reducing new supply.
Ethereum and Smart Contracts
Ethereum goes beyond simple value transfer: it runs smart contracts — self-executing code that operates without intermediaries. Most DeFi protocols, NFT platforms and DAOs are built on Ethereum.
ETH is also used to pay "gas fees" — the cost of executing operations on the network.
Altcoins and Their Risks
Every cryptocurrency other than Bitcoin is an altcoin. Thousands exist; the vast majority have thin liquidity and can lose virtually all their value.
When reading about a crypto project, it is worth examining the team behind it, the technical whitepaper, the stated use case and community size. Pump-and-dump schemes are common in the crypto space — extraordinary short-term gain claims warrant scepticism.
Wallets and Security
Crypto assets are controlled by private keys. Lose your private key and you permanently lose access to your funds — there is no recovery option.
Hot wallets (software, exchange accounts) are convenient but carry hacking risk. Cold wallets (hardware devices) are physically isolated from the internet and far more secure for significant holdings.
"Not your keys, not your coins": crypto held on an exchange is technically the exchange's asset. Exchange hacks and insolvencies have caused billions in losses.