Becoming Web3 Native Pt 4: Getting Started with Crypto

This is Part 4 of our 8 part series on how you can use Web3 in your everyday life.

Part 4: Getting Started with Crypto

Crypto isn’t just for traders or tech enthusiasts—it’s becoming a practical tool for everyday life. Whether you want to store money securely, send payments across the world, or invest for the future, understanding the basics of cryptocurrency is the first step. But buying crypto safely, storing it properly, and avoiding common mistakes is critical. In this section, we’ll break down the different types of cryptocurrencies, how to buy and hold them securely, and what you need to know before making your first transaction.

The Basic Types of Cryptocurrency (Explained for Everyday Users)

Cryptocurrency isn’t just Bitcoin and Ethereum—there are thousands of different digital assets, each with its own purpose. But for everyday users, most cryptocurrencies fall into a few key categories that define how they work and what they’re used for.

Here’s a breakdown of the main types of cryptocurrencies and why they matter.

1. Payment Cryptocurrencies (Digital Money)

🔹 Examples: Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Dash (DASH)
🔹 Purpose: Digital cash for payments, savings, and money transfers
🔹 Best for: Sending money, making purchases, and holding long-term value

How They Work:

• These cryptocurrencies were designed to function as decentralized money, replacing traditional cash.

• Bitcoin (BTC) is the most well-known, often called “digital gold” because people store value in it like gold.

• Litecoin (LTC) and Bitcoin Cash (BCH) were created as faster, cheaper alternatives for everyday payments.

Why They Matter for You:
✅ No need for a bank—send money to anyone in the world, anytime
✅ Lower fees than bank transfers or credit cards
✅ Can be a long-term investment (but with price volatility)

2. Stablecoins (Crypto Without Volatility)

🔹 Examples: USD Coin (USDC), Tether (USDT), DAI, Binance USD (BUSD)
🔹 Purpose: Cryptocurrencies pegged to stable assets like the U.S. dollar
🔹 Best for: Holding savings, avoiding crypto price swings, and making easy payments

How They Work:

• Stablecoins are designed to stay at a fixed value (e.g., 1 USDC = $1 USD).

• They’re backed by real-world assets (cash reserves, bonds) or algorithmic mechanisms to maintain their price.

• USDC and USDT are backed by dollars in bank accounts, while DAI is decentralized, backed by smart contracts.

Why They Matter for You:
✅ Perfect for everyday payments (no price fluctuations like Bitcoin)
✅ Easier to store and send money internationally
✅ Earn higher interest on stablecoins than traditional savings accounts in DeFi

3. Smart Contract Platforms (Programmable Blockchains)

🔹 Examples: Ethereum (ETH), Solana (SOL), Cardano (ADA), Avalanche (AVAX)
🔹 Purpose: Power decentralized applications (dApps) and enable smart contracts
🔹 Best for: Using DeFi apps, NFTs, and blockchain-based services

How They Work:

• These blockchains allow developers to build applications on top of them, similar to how the internet powers websites.

• Ethereum (ETH) is the most widely used, powering DeFi, NFTs, and DAOs.

• Solana (SOL) and Avalanche (AVAX) are faster alternatives, focusing on scalability and lower fees.

Why They Matter for You:
✅ Run decentralized apps (dApps) without a middleman
✅ Buy, sell, and trade NFTs
✅ Earn interest in DeFi platforms

4. DeFi & Yield Cryptos (Earning & Lending)

🔹 Examples: Aave (AAVE), Compound (COMP), Uniswap (UNI), Curve (CRV)
🔹 Purpose: Power decentralized finance (DeFi) services like lending, borrowing, and trading
🔹 Best for: Earning passive income and trading without a bank

How They Work:

• DeFi tokens are used in decentralized financial applications.

• AAVE and COMP allow users to lend and borrow crypto without a bank.

• Uniswap (UNI) and Curve (CRV) power decentralized exchanges, where people swap tokens without a middleman.

Why They Matter for You:
✅ Earn high interest by lending stablecoins
✅ Trade crypto without using a centralized exchange
✅ Access crypto loans without credit checks

5. Governance Tokens (Voting & Community Ownership)

🔹 Examples: Maker (MKR), Uniswap (UNI), ApeCoin (APE)
🔹 Purpose: Give holders voting power in decentralized projects
🔹 Best for: Participating in decentralized governance & DAOs

How They Work:

• Governance tokens let users vote on project decisions and help shape the future of DeFi apps, NFT projects, and DAOs.

• Example: Uniswap (UNI) holders vote on protocol upgrades for the Uniswap exchange.

Why They Matter for You:
✅ Get a say in how Web3 projects evolve
✅ Earn rewards and voting rights for participating in DAOs

6. NFT & Metaverse Tokens (Digital Ownership)

🔹 Examples: Decentraland (MANA), The Sandbox (SAND), Axie Infinity (AXS)
🔹 Purpose: Enable ownership of digital assets in games, virtual worlds, and NFT marketplaces
🔹 Best for: Gamers, NFT collectors, and creators in the metaverse

How They Work:

• These tokens power blockchain-based virtual worlds and gaming economies.

• MANA and SAND let users buy land and assets in the metaverse.

• AXS is used for in-game rewards and purchases in Axie Infinity.

Why They Matter for You:
✅ Own digital property and in-game assets that hold value
✅ Earn money through play-to-earn games
✅ Buy and sell NFTs and virtual real estate

7. Privacy Coins (Anonymous Transactions)

🔹 Examples: Monero (XMR), Zcash (ZEC), Dash (DASH)
🔹 Purpose: Enable private, untraceable transactions
🔹 Best for: People who want extra financial privacy

How They Work:

• Unlike Bitcoin, which has a public ledger, privacy coins hide transaction details.

• Monero (XMR) and Zcash (ZEC) use cryptographic methods to ensure no one can track your transactions.

Why They Matter for You:
✅ Protects your financial privacy
✅ Stops companies, banks, or governments from tracking your spending
✅ Useful in high-censorship countries

8. Meme Coins & Speculative Tokens (High-Risk, High-Reward)

🔹 Examples: Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE)
🔹 Purpose: Originally started as jokes but gained cult followings and value
🔹 Best for: Fun speculation, but very risky investments

How They Work:

• Dogecoin (DOGE) started as a meme but now has real-world use for tips and payments.

• Shiba Inu (SHIB) and Pepe (PEPE) are community-driven tokens that fluctuate wildly in price.

Why They Matter for You:
✅ Good for fun and speculation (but not serious investments)
✅ Some meme coins gain real utility over time
✅ Extremely high risk—only invest what you can afford to lose

Which Crypto Type is Right for You?

💰 Want to store value & make payments? → Bitcoin (BTC) or Litecoin (LTC)
🔒 Want to avoid price swings? → Stablecoins (USDC, DAI)
📈 Interested in investing & DeFi? → Ethereum (ETH), Aave (AAVE), Uniswap (UNI)
🌍 Want to send money globally? → USDC or USDT
🎮 Love gaming & NFTs? → Decentraland (MANA) or Axie Infinity (AXS)
🕵️ Need privacy? → Monero (XMR) or Zcash (ZEC)

How to Buy Crypto Safely (Step-by-Step Guide for Everyday Users)

Buying cryptocurrency is easier than ever, but safety is key. Scams, phishing attacks, and bad exchanges can put your funds at risk. If you’re new to crypto, follow this step-by-step guide to buy crypto safely and securely.

The Quick & Dirty Formula

1️⃣ Choose a regulated exchange (Coinbase, Kraken, Binance.US).
2️⃣ Secure your account (2FA, strong password, withdrawal whitelisting).
3️⃣ Use safe payment methods (bank transfer > debit card > PayPal).
4️⃣ Move your crypto to a wallet (not your exchange).
5️⃣ Stay alert for scams and avoid phishing sites.
6️⃣ Track your investments and keep tax records.

Step 1: Choose a Safe & Reputable Crypto Exchange

Not all crypto exchanges are trustworthy. Pick one that has strong security, insurance, and a good track record.

Best Crypto Exchanges for Beginners (Regulated & Safe)

🔹 Coinbase – Best for beginners, easy to use, FDIC insurance (US).
🔹 Kraken – Strong security, low fees, good for advanced users.
🔹 Binance.US – Good for low trading fees and variety of coins.
🔹 Gemini – Highly regulated, strong security, good for security-conscious users.

🚫 Avoid “too good to be true” offers on social media or sketchy apps.

✅ Tip: Check if the exchange is licensed in your country and if it offers FDIC insurance for cash deposits.

Step 2: Set Up Two-Factor Authentication (2FA) Before Buying

🔐 Before you buy crypto, secure your account!

• Enable 2FA (Two-Factor Authentication) on your exchange account.

• Use an authenticator app (Google Authenticator, Authy) instead of SMS (SIM swaps are a risk!).

• Use a strong, unique password and store it in a password manager.

✅ Tip: Turn on withdrawal whitelisting so funds can only be sent to approved addresses.

Step 3: Buy Crypto the Right Way (Avoid Overpaying on Fees!)

Best Crypto Payment Methods (Lowest Risk & Fees)

💳 Bank Transfer (ACH, SEPA, Wire) – Low fees, safe, but slow (1-3 days).
💰 Debit Card – Instant buy, but higher fees (2-4%).
📲 PayPal (Select Exchanges Only) – Fast, but high fees.
🏦 Credit Card – Not recommended (high fees & cash advance charges).

🚫 Avoid buying from unverified peer-to-peer sellers unless using a secure escrow platform (e.g., Paxful, Binance P2P).

✅ Tip: Always check fees before buying—some exchanges charge 2-4% for instant buys!

Step 4: Move Your Crypto to a Secure Wallet (Not Your Exchange!)

❗ DO NOT store large amounts of crypto on an exchange. Exchanges can be hacked, freeze accounts, or go bankrupt (see FTX collapse!).

Best Wallets for Storing Crypto Safely

🟢 For Everyday Use (Hot Wallets) → MetaMask, Trust Wallet, Coinbase Wallet
🛡 For Maximum Security (Cold Wallets) → Ledger Nano X, Trezor Model T

✅ Tip: If you’re holding crypto long-term, use a hardware wallet (cold storage).

Step 5: Learn How to Recognize Scams & Stay Safe

Crypto is full of scams—here’s how to avoid them:

🚨 Common Crypto Scams to Watch Out For:
❌ Fake Giveaways – No one is giving away free Bitcoin or Ethereum.
❌ Impersonation Scams – Scammers pretending to be Elon Musk, Binance, or "customer support."
❌ Phishing Websites – Always double-check URLs before entering your wallet details!
❌ Pump-and-Dump Coins – Coins that spike fast & crash—don’t buy random hyped tokens.
❌ Investment Scams – If it promises guaranteed returns, it’s a scam.

✅ Tip: Always verify the official website URL and never give out your seed phrase or private keys.

Step 6: Track & Manage Your Crypto Responsibly

📊 Use a portfolio tracker to monitor crypto prices and holdings:

• CoinGecko (https://www.coingecko.com/)

• CoinMarketCap (https://coinmarketcap.com/)

• Delta App (iOS/Android)

📜 Keep records for taxes – Crypto is taxable in most countries! Use a tool like Koinly, CoinTracking, or CryptoTrader.Tax to track gains/losses.

✅ Tip: If you hold crypto long-term, store a written backup of your seed phrase (never digitally!).

Final Thoughts: Buying Crypto The Right Way

Buying crypto is easier than ever, but doing it safely and smartly is what truly matters. By choosing a reputable exchange, securing your account with strong passwords and 2FA, and transferring your assets to a private wallet, you’re taking the right steps to protect your digital investments. Remember, crypto isn’t just about speculation—it’s about financial independence, fast and borderless transactions, and unlocking new opportunities in Web3. Start small, stay secure, and keep learning. The more you understand, the more confident you’ll be in navigating this evolving digital economy.

Other parts of this edition:

• Part 1: Web3 Wallets- Your Passport to Web3

• Part 2: Learn By Doing: How to Use DeFi

• Part 3: Creating a Web3 Identity

Editorial: So You Wanna Be Web3 Native? Let's Go!

Case Study: How Sarah Went from Web3 Newbie to Web3 Native (and Why It Changed Her Life)

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