Lesson 3: Cryptocurrency Market

Today, you’ll learn all about the crypto market and how to take advantage of the growing economy. 

The definition of market cap in cryptocurrency is quite similar to the definition in traditional securities.

In cryptocurrency, the market cap is the current circulating supply of tokens multiplied by the current token price. So, for example, if the current bitcoin price is $20 and there are 100 bitcoin in circulation, then the bitcoin market has a capitalization of $2,000.

As of August 2019, the estimated crypto market capitalization was over $250 billion.

As you learned earlier, there are thousands of cryptocurrencies. Here’s why.


1. Natural progression

Bitcoin was invented as a decentralized, peer-to-peer alternative to the traditional financial system.

Bitcoin is an electronic payment system that uses cryptographic methods and a peer-to-peer version of electronic cash for secured financial transactions.

But as bitcoin became more popular and more widespread, people began realizing that there are a lot of different ways that the blockchain technology underpinning cryptocurrencies can be used to create other kinds of digitally-based solutions to other issues. 

Some of the problems that cryptocurrencies are being developed to solve include:  

  1. Payments and currencies: Bitcoin, Litecoin, Nano, Dogecoin.
  2. Privacy: Monero, Verge, Komodo, Zcash.
  3. Computing and data management: Siacoin, Golem, Holo.
  4. Platforms: Ether, Cardano, NEO, NEM.
  5. Business and protocols: Binance Coin, ICON, VeChain, Ardor.
  6. Fintech: Ripple, Stellar, OmiseGo, QASH.
  7. Entertainment: Steem, Tron, Loom, WAX.

Sometimes cryptocurrencies are created during a process known as forking, or the separation of a blockchain into two branches.

There are two types of cryptocurrency forks: a soft fork and a hard fork

  1. A soft fork occurs when an update takes place, and the blockchain remains valid even after that update. An example of a soft fork is SegWit.
  2. A hard fork happens when the older version of the blockchain remains valid even after the emergence of a new blockchain version. Examples of a hard fork are Bitcoin Cash, Bitcoin Gold, and SegWit2x.


2. Huge financial returns and the ICO boom

Hundreds of new cryptocurrencies were launched during the ICO boom of 2017— all in the hope of grabbing massive financial returns that existing cryptocurrencies experienced that year:

Initial Coin Offerings (ICOs) are a new form of fundraising made possible by cryptocurrency. Similar to crowdfunding, ICOs allowed founders and teams to raise funds for new projects by rewarding early investors with first access to their cryptocurrency.  

The resulting ICO boom brought a wealth of new funding, interest, and attention to cryptocurrencies and their possible applications in a wide variety of industries.

3. How to enter the crypto market today

You might now be wondering, how you can enter the cryptocurrency market.

The best way is to follow our step-by-step beginners’ guide here:

  1. Download Abra. Abra uses the programmable money features of Bitcoin to create a non-custodial wallet, meaning your wallet is in your control.
  2. Connect a bank account/credit card/debit card. Note that when you buy cryptocurrencies using a bank account, it will take 4–5 days to process. But when you buy cryptocurrencies using a credit card or debit card, you can buy bitcoin instantly, and it will take approximately 10 to 20 minutes to arrive in your Abra wallet.
  3. Choose a cryptocurrency to exchange. The Abra app is the easiest way to buy, sell, and exchange between 20+ cryptocurrencies. You can learn more about each of those cryptocurrencies on our website here. Once you’ve chosen the cryptocurrencies you’re interested in, simply add them to your portfolio in the Abra app.
  4. Buy your cryptocurrency. The final step is to buy your chosen cryptocurrency. Once you’ve added funds to your wallet, and added new cryptocurrencies to your portfolio, simply exchange to make your first purchase. Remember you can always buy fractions of cryptocurrency.

Tomorrow, we’ll dive even deeper, when you’ll learn all about cryptocurrency prices.

Glad to see you here,

Team Abra

Upcoming Lesson: [Lesson 4] Cryptocurrency prices


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