What is Cryptocurrency? How to Buy it and Best Cryptocurrencies for Beginners

Is it your first day in Crypto-land?

Or are you planning to make your grand entrance in it?

Then, give a round of applause to your search engine algorithm because it landed you on the perfect page!!

Here, you will get answers to some of the most googled questions by crypto beginners, like- What is a cryptocurrency? How to buy cryptocurrency in India? Is Crypto legal in India? Which is the best cryptocurrency to invest in India?

So, why delay?

Let’s gain knowledge and slay!

First things first so we will begin with what is a cryptocurrency.

What is Cryptocurrency?

A cryptocurrency is a digital currency that exists virtually and is used for payment or settling the transactions. Whenever someone sends crypto to someone else a distributed network of computers secures and verifies the transaction rather than a person or middlemen. It is called “crypto” currency because the network behind it uses cryptographic techniques to avoid counterfeiting and double-spending.

Unlike fiat currency (cash) which involves the role of bank(s) as intermediaries, a cryptocurrency doesn’t rely on a bank. Instead, it facilitates a peer-to-peer transaction system where anyone can directly send cryptocurrency to anyone without any third-party interference. However, unlike fiat money, which exists physically and can be exchanged in real, payments made in cryptocurrency occur digitally and exist entirely as digital entries on an online ledger.

Apart from using cryptocurrencies to transfer value without intermediaries, one can invest in them or trade them on crypto trading platforms like Flitpay to register profits. If anyone wants to store the cryptocurrencies, they can do that through a crypto wallet. Notably, a cryptocurrency is always fungible, meaning each of its units will have the same value just like one dollar equals another dollar.

The first ever cryptocurrency is Bitcoin, with the ticker symbol, BTC. It was launched in 2009 by anonymous creator, Satoshi Nakamoto. Currently, Bitcoin (BTC) is the largest cryptocurrency with a market cap of nearly $1.36 trillion. Some other top cryptocurrencies are - Ethereum (ETH), Solana (SOL), Tether (USDT), Dogecoin (DOGE), Cardano (ADA), Polygon (MATIC) and more.

How Does a Cryptocurrency Work?

Cryptocurrency works on a revolutionary Blockchain Technology built originally to store large information in a decentralized manner.

Blockchain means a chain of blocks, indicating its fundamental architecture built using multiple units of “blocks.” A block is a file that permanently stores and records transaction data.Each block has three key components- Data, Hash and Previous Block Hash.

Here, Data is the specific information a block stores for the network. For instance, in the case of the Bitcoin blockchain, this data is the details of various senders and receivers, along with the amount of BTC involved in their transaction. On the other hand, the Hash component of a block works like its unique fingerprint, making it possible for the blockchain network to distinguish each block from another. Since each block connects to another, a block also needs to have the hash information of its previous block to stay in the right sequence. Such a sequential arrangement of blocks creates a chain called a Blockchain containing transaction details of a particular cryptocurrency.

Unlike centralized technologies where only a single computer or institution owns and validates all the information, a distributed network of computer nodes handles this work in the case of blockchain-backed cryptocurrencies. Each node owns a copy of the data stored in the blockchain. This way, all participants have the same information and none owns the right to make changes single handedly. Once the blockchain stores transaction details of a cryptocurrency, that information becomes immutable because any change in data will change the hash value of the block and the change in hashes of the succeeding blocks. Such a situation will disturb the entire blockchain.

An important thing to note is that while blockchain is the underlying technology for cryptocurrencies, it also has various other use cases.

But why do cryptocurrencies exist?

Do they even have any advantage or are they just some magic money with technical mumbo jumbo?

Let’s figure out by knowing the pros and cons of Cryptocurrencies.

Pros of a Cryptocurrency

Here are some key pros of cryptocurrency-

• Since a cryptocurrency operates in a decentralized environment where every network participant has the same piece of information, the use of cryptocurrency eliminates the need to trust a single governing authority for transactions.


• Since the data of transactions becomes immutable after being stored in the blockchain, it makes any kind of data tampering and mismanagement extremely difficult to execute. This is not the case with other forms of money like fiat.


• Due to the absence of intermediary parties in its peer-to-peer infrastructure, the cryptocurrency transaction cost is usually lower than other means. For example, if you need to transfer money internationally, it involves multiple intermediary banks and institutions. The involvement of multiple mediators raises the transaction cost to compensate them for their efforts. However, if you choose cryptocurrency for international payments, it will eliminate the need of middlemen, becoming more feasible than transferring fiat.


• Not only do cryptocurrency transactions are much cheaper and more affordable than fiat transactions, but they are also faster. While wire transfers and other means of transferring money internationally take hours and even days, crypto transfers only take seconds to execute.


• Many people see cryptocurrency as an inflation hedge. This is because the purchasing power and value of traditional currencies like the Dollar and Yuan, have been declining due to inflation. On the contrary, the value of cryptocurrencies like Bitcoin and Ethereum has seen considerable upsides since their launch. A key reason behind such performance is the rising demand and even the capped supply in some cases. Whale Fiat money has no fixed cap supply, Bitcoin has a fixed maximum supply of 21 billion. This limited supply has been a key contributor to driving Bitcoin's (BTC) price to new highs. For this reason, many people buy cryptocurrencies and store them to beat inflation in the long run.


• While you do not get any option when it comes to using fiat currency, cryptocurrencies give a wide range of options to choose from. This is because, unlike traditional money, Cryptocurrencies do not have an operational geological limitation. You can use any cryptocurrency from any country.


• A cryptocurrency helps you to be your own bank, eliminating the requirements of any identity card or other details required to open a bank account. You can save, lend and transfer them to others on your own, given that you have an internet and a mobile device.


• Cryptocurrencies come with higher fund security because no one can steal them unless they have access to your private keys. If you forget or lose your private keys, then even you can not recover your crypto funds. Additionally, since the transactions are encrypted with cryptographic techniques and a decentralized network, it becomes trickier for hackers to steal crypto funds.

Cons of a Cryptocurrency

• Due to their infancy stage, cryptocurrency prices are highly volatile. While this can lead to immense profit, it can also wipe out your investments in the blink of an eye. This unpredictability in cryptocurrency trading makes it a risky investment option, especially for those who enter without proper research.


• Unlike the equity market and other investment classes, the Cryptocurrency market is not yet regulated. Some countries have even banned crypto. This absence of regulations increases the risk of crypto scams and market manipulations. However, there have been multiple talks in the global summits and conferences to bring in a global crypto regulation soon.


• Although blockchain technology provides robust security to cryptocurrencies, hacking attempts, and cyber thefts are common in the crypto space. Cybercriminals have attacked multiple cryptocurrency exchanges and projects in the past years, causing a lot of financial losses for investors.


• Many countries like India, impose heavy taxes on cryptocurrency profits and trading. Indians are required to pay a 30% tax on their crypto profits with no option to offset it against their losses. Additionally, they also need to pay a 1% TDS on their crypto trades, making crypto trading and investing a bit less attractive.

After knowing so much about the crypto world, you might be itching to know how to snag some for yourself.

So, let's break it down and get into the big question!

How to Buy Cryptocurrency in India?

To buy cryptocurrency in India, you need to follow three simple steps involved.

STEP 1: Select a Platform

The initial step to buying cryptocurrency in India is to find the right platform for it. Generally, new investors go for a trusted native centralized cryptocurrency exchange platform to start their crypt journey. However, the availability of a lot of options to choose from may confuse you.

Well, not till we are here!

Here are some tips on how to select the best cryptocurrency trading platform in India -

• The first and foremost point to check is whether the platform is FIU-approved or not. FIU is the Financial Intelligence Unit of India that makes sure that the crypto exchanges approved by it abide by the PMLA (Prevention of Money Laundering Act) guidelines set by the government of India. Thus, choosing an FIU-approved cryptocurrency exchange will make sure that you get a legitimate investing environment.


• Go for the platform that charges a lower trading fee (0.1%-0.2%) instead of varying fees depending on the trading volume. It will help you to get a clear idea of how much of your deposited amount goes to the platform.


• Look for a crypto exchange or trading platform that has strong customer support. This is because being new in the field, you might require more assistance and reliable customer service will help there.


• One thing that many people miss is the social media presence of the Crypto exchange platform they opt for. It may look like an insignificant factor but it tells a lot about the commitment of the exchange towards its users and market. A strong social media presence indicates that the platform is here to stay as of now. Checking if the comment sections of the platforms are open tells you about their answerability.


• If you are a newbie, opt for a simplified cryptocurrency exchange instead of that with multiple advanced features catering to big traders. This is because a lot of features and options can confuse you in the beginning.


• Also, check the INR and crypto deposit and withdrawal status of the cryptocurrency exchange you go for. This is because only a few Indian cryptocurrency exchanges allow seamless crypto and INR withdrawals. Thus, make sure to consider it when finalizing your Cryptocurrency exchange.

One cryptocurrency exchange platform that meets all these factors is Flitpay. This FIU-approved cryptocurrency exchange has a simplified interface and strong customer support on WhatsApp, Telegram and Mail.

Here is the login link.

STEP 2: Create an Account

Once you select the right crypto exchange, it's time to create an account on it. This process requires you to provide your basic information like name, mobile number, and email address. Once you verify your account details, you will be required to complete your mandatory KYC verification. It is a mandatory step for every FIU-approved cryptocurrency exchange as it ensures that the users get a safe and secure trading environment. Once you complete your KYC verification by submitting your ID card and PAN card details, you will become eligible to deposit INR and buy the cryptocurrency of your choice.

STEP 3: Adding your Bank Account

After completing your KYC verification, it is time to do the final step, which is connecting your bank account to your Crypto Exchange account. This will help you seamlessly deposit INR from your bank to the platform for investing and trading purposes.

STEP 4: Buy A Cryptocurrency

This is the step that requires some research and knowledge. The choice of cryptocurrency for beginners varies depending on their risk appetite, financial goals and market perspectives. However, there are a few proven cryptocurrencies for beginners that will help you decide.

Let’s discuss which are the best cryptocurrencies for beginners in the below section.

Best Cryptocurrency for Beginners

Here are the top 5 best Cryptocurrency options for beginners along with reason and a brief description -

Best Cryptocurrency for Beginners #1- Bitcoin (BTC)

Bitcoin is the first ever cryptocurrency that was launched in 2009 by an anonymous developer, Satoshi Nakamoto. To date, people have yet to learn the real identity behind Satoshi. Satoshi created Bitcoin as a peer-to-peer payment network with its native currency BTC as the new kind of money. It uses peer-to-peer technology to operate without any central authority or bank. The Bitcoin network is entirely decentralized and open source, meaning no one owns or controls Bitcoin and everyone can access its codes. The total number of Bitcoin (BTC) that can ever exist is only 21 million. Out of these, over 93.85% of Bitcoin (BTC) is already in circulation. The remaining are yet to come into existence. The process through which new Bitcoins come into existence is called mining. It is an energy-intensive process that

Bitcoin mining is an energy-intensive process where various mining devices and software compete to solve cryptographic problems. Whichever miner solves the cryptographic problem first gets the opportunity to mine a new Bitcoin block and verify the transactions for it. After a successful verification, they get the transaction fee and a predetermined BTC as a reward. This predetermined amount of BTC for miners keeps reducing by 50% every four years through Bitcoin Halving.

Being the pioneer crypto, Bitcoin enjoys a massive first-mover advantage, making it one of the best cryptocurrencies for beginners. Unlike other cryptocurrencies that exhibit sharp volatility trends regularly, Bitcoin (BTC) is comparatively less volatile due to its big market cap and long-term holders. With a magnificent market cap of over $1.3T, Bitcoin (BTC) is larger than Meta, Berkshire Hathaway, and many other tech mammoths. It has come a long way since its near-zero price in 2009 to over $69,000 in 14 years, proving its resilience multiple times. Last year only in 2023, Bloomberg declared Bitcoin as the best-performing asset in Q1. In 2024, four countries have initiated the trading of Bitcoin Spot ETFs too, driving the institutional interest in this digital asset. Thus, the future outlook of Bitcoin looks extremely positive. All these factors contribute towards making Bitcoin the best cryptocurrency for beginners. In our Bitcoin cryptocurrency price prediction, we discussed more of its positive upsides in detail.

Best Cryptocurrency for Beginners #2- Ethereum (ETH)

The second best crypto for beginners is undoubtedly Ethereum (ETH). It is the powerhouse of most DApps, DeFi and NFT projects in the crypto space. Boasting a market cap of over $450 billion with one of the highest transaction volumes in the crypto market Ethereum (ETH) is largest altcoin with a lot of untapped potential due to the rising popularity of web3 verticals Smart Contracts, like DeFi, Gaming, RWA, Metaverse and NFTs.

Unlike Bitcoin which has limited functionalities, Ethereum is designed to be scalable and programmable. Along with establishing a peer-to-peer network, Ethereum also securely executes and verifies unique application codes, called Smart contracts. Through them, parties can execute actions without trusting any central authority. Anyone developing any project on the Ethereum blockchain is required to spend its native token, ETH, to pay the gas fee of the network. Unlike BTC with a capped supply of 21 million, ETH has no capped maximum supply.

Best Cryptocurrency for Beginners #3- Solana (SOL)

Solana (SOL) is another best cryptocurrency for beginners looking for a high-risk reward type of investment. It has given immense returns of over 800% in the past year, making it one of the most passive investments. Solana ranks fifth with a market cap of $79.9 billion, despite being 33% down from its all-time high value of $260. With over 125 protocols, the Solana blockchain executes an average of 100 million transactions every day. Some most popular cryptocurrency projects on Solana are DEXs like Jupiter and Orca, lending protocols like Solend, NFT projects like Mad Lads and liquid staking protocols like Marinade Finance and Jito. There are also many popular meme coins built on Solana like BONK, WIF, BOME and more.

The working and use cases of Solana are very much similar to Ethereum. It also facilitates the creation of Web3 projects like DApp, NFT and DeFi protocols but with improved scalability and faster speed. To achieve that improved performance, the Solana protocol employs a proof-of-history (PoH) consensus that helps Solana nodes verify transactions quicker than many of its competitors. However, Solana (SOL) often experiences higher volatility than Ethereum (ETH) and Bitcoin (BTC).

To get more advanced information on Solana, give a read to our Solana price prediction.

Best Cryptocurrency for Beginners #4- Arbitrum  (ARB)

In case you are looking for a newer project with higher price potential, Arbitrum can be a great choice. It is a leading layer-2 technology that helps to build projects on Ethereum but with improved performance. It has been developed to provide higher throughput, and lower transaction costs while still being compatible with Ethereum. Due to this compatibility, developers can easily deploy their existing Smart contracts on it. For that reason, multiple leading crypto projects like Chainlink, The Graph, Etherscan, Alchemy, Uniswap, Aave, Curve, SushiSwap, MakerDAO and Infura, along with many others, use Arbitrum.

As a result, the user adoption of Arbitrum has been on a continuous surge since its launch. The total value locked (TVL) in Arbitrum protocol has also hit $3,148,514,895. Unlike other Ethereum scaling solutions, Arbitrum does not sacrifice security for efficiency. It inhibits the time-tested security protocols of the Ethereum network, making it a reliable choice for businesses managing high-value assets and sensitive client information.

Best Cryptocurrency for Beginners #5- Dogecoin (DOGE)

If you are looking for a memecoin and are comfortable with high risk, then you can buy Dogecoin (DOGE). Being the largest meme coin in the crypto space, DOGE has built a reputation for itself in the past few years. It is currently the eighth-largest cryptocurrency by market cap. Since its creation, DOGE has given its investors stellar rewards of about 28,997.54%. Currently 80% down from its ATH, DOGE can be the best cryptocurrency for beginners looking for a high-risk-high reward kind of investment.

Its creation originates from the popular “doge” internet meme and hence features a Shiba Inu dog on its logo. The creators envisioned it as a fun, light-hearted cryptocurrency that would help build a global community for loyal dog lovers. Tesla CEO, Elon Musk has been a huge supporter of DOGE on social media since its launch. He even shared that Dogecoin is his favourite coin at times. You can find detailed information about this meme coin in our Dogecoin price prediction.

Thus, our top picks for the best cryptocurrency for beginners are-

FAQs

Is Crypto legal in India?

Yes, Crypto is legal in India. However, it is not regulated by any central authority as of now. So trading in Cryptocurrency is at investors’ risk. Back in 2013, the Reserve Bank of India (RBI) issued a warning to people dealing with virtual currencies and in 2017, it restricted banks and other institutions from providing financial services to cryptocurrency traders. After a landmark judgment by the Supreme Court in March 2020, this crypto ban was finally removed. Now, Crypto trading is legal in India. In fact, the Financial Minister, Nirmala Sitaraman, introduced a 30% tax on digital assets along with 1%TDS, increasing the legality of cryptocurrencies in the country.

Is Cryptocurrency good or bad?

Whether cryptocurrency is good or bad depends on the definition you apply to it. Crypto proponents argue it offers decentralization, financial inclusivity, and the potential for significant returns on investment. Its underlying blockchain technology promotes transparency and security. However, critics point out its association with illegal activities, market volatility, and environmental concerns due to high energy consumption. Regulatory uncertainty and the potential for financial loss due to market fluctuations further complicate its reputation. Ultimately, whether crypto is good or bad depends on its usage, regulation, and individual perspective. Responsible investment and usage can harness its benefits while mitigating risks.

Which is the best crypto for beginners in 2024?

Some best crypto for beginners are - Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Arbitrum (ARB) and Dogecoin (DOGE). Each of them holds significant positions in the crypto space and can show considerate upward movement in the upcoming time.

Where to buy Cryptocurrency in India?

Flitpay is the best platform to buy cryptocurrency in India. Here, you can easily buy BTC, ETH, DOGE, SOL and more than 150+ other cryptocurrencies. It is an FIU-approved cryptocurrency exchange with strong customer support and quick deposits/withdrawals.

How to buy Bitcoin in India?

You can easily buy Bitcoin in India on the safest crypto exchanges, like Flitpay, with the lowest fees.

To Buy Bitcoin (BTC) in India:

1. Register on Flitpay and create an account.
2. Verify your identity through Know-your-customer (KYC)
3. Add INR or Fiat currency, corresponding to the amount of BTC you want to buy.
4. Instantly buy BTC with the deposited funds.

Is cryptocurrency for beginners?

Yes, crypto is for beginners as it offers a great opportunity to enter the world of digital finance. Many platforms and resources are specifically designed to make crypto for beginners accessible and easy to understand. With user-friendly interfaces, educational tools, and supportive communities, newcomers can learn the basics of cryptocurrency trading, investing, and blockchain technology. Additionally, many exchanges like Flitpay offer demo accounts for practice without real financial risk. By starting with small investments and gradually increasing their knowledge, beginners can confidently navigate the crypto space.

Give some cryptocurrency examples.

There are many cryptocurrency examples like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), Polygon (MATIC), Dogecoin (DOGE), Uniswap (UNI), Ripple (XRP), Pendle (PENDLE), Tron (TRON) and more. Thousands of different cryptocurrencies exist in the crypto market today.

Is crypto safe for beginners?

Yes, Crypto can be safe for beginners if they approach it with caution and proper education. Beginners should focus on learning the basics of cryptocurrency and understanding the risks before entering the crypto space. The Internet has multiple informational resources to do so. It's also wise to start with small investments and avoid putting in more money than one can afford to lose. Starting with FIU-approved exchanges with robust security is also crucial. By taking these precautions, beginners can minimize risks when making their way into cryptocurrencies.

Which crypto to buy first?

You can start by buying relatively less volatile cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). With time when you start becoming more comfortable with the volatility and speculations, you can go for higher-risk cryptocurrencies like Solana (SOL), Cardano (ADA), Arbitrum (ARB), Polygon (MATIC) and more. In case you are looking for higher volatility, meme coins like BONK, FLOKI, PEPE, DOGE, and WIF can be your best bet. However, make sure to do your own research before investing in any cryptocurrency.