Beginner Lesson 5: BTC, ETH, and Stablecoins—Get to Know These Three First
The previous few posts covered security, depositing funds, spot and futures trading, and candlestick charts. Now that you’ve got the tools, let’s talk about the three types of coins you’ll encounter most often. No matter what altcoins you explore later, you’ll almost always come across BTC, ETH, and stablecoins. Learn to tell them apart first, and a lot of things will make more sense.
1. BTC (Bitcoin)
Bitcoin was the first cryptocurrency, launched in 2009 by someone using the pseudonym “Satoshi Nakamoto.” Its most important feature is a fixed supply cap of 21 million coins. New bitcoins are gradually produced through mining, and the amount issued is cut in half roughly every four years. The most recent halving was in April 2024.
Many people call it “digital gold,” mainly because its supply is fixed, it’s decentralized, and it has the longest track record. Its use cases are relatively limited, primarily transferring money and storing value.
In terms of market trends, BTC is basically the barometer for the entire market. When BTC takes a big hit, it’s hard for most other coins to avoid the fallout. That’s what we meant in the previous post by “don’t just look at an individual coin—look at the bigger picture.”
2. ETH (Ethereum)
Ethereum launched in 2015. Its biggest difference from Bitcoin is that it can run “smart contracts”—simply put, programs that run on the blockchain. Many of the DeFi projects, NFTs, and various on-chain tokens you hear about today are built on Ethereum or on chains compatible with it.
Any operation on Ethereum requires a transaction fee called a gas fee, which is paid in ETH. Fees can rise noticeably when the network is busy.
In September 2022, Ethereum completed “The Merge,” switching from mining to staking to maintain the network. Also note that ETH doesn’t have a fixed supply cap like BTC—this is something people often get mixed up.
In broad terms: BTC is more like a store of value, while ETH is more like a platform, with ETH itself acting as the platform’s “fuel.”
3. Stablecoins
Stablecoins are designed to keep their price pegged to $1. The most common ones are USDT and USDC. On exchanges, they essentially play the role of “dollars”: you use USDT to buy coins after depositing funds, to place orders, and to convert back into when you sell and want to reduce your exposure to risk.
Major stablecoins like USDT and USDC claim to be backed by reserves of equivalent value, such as U.S. dollars and Treasury bonds. But they aren’t bank deposits, don’t have deposit insurance, and aren’t completely risk-free:
- In March 2023, Silicon Valley Bank in the U.S. ran into trouble. Some of USDC’s reserves were held there, and its price fell noticeably below $1 for a while before recovering.
- UST, in May 2022, fared much worse. It was an algorithmic stablecoin that maintained its price through an algorithm and didn’t have sufficient asset reserves. It eventually collapsed completely, leaving many people with nothing.
So “stablecoin” only means that the coin is designed to have a stable price; it doesn’t mean there’s zero risk. Beginners should stick to major stablecoins and avoid chasing high returns with stablecoins from unknown sources.
4. The Most Common Beginner Mistake: Choosing the Wrong Network When Transferring Coins
The same USDT can be issued on several different blockchains, such as Ethereum (ERC20), TRON (TRC20), and BNB Chain (BEP20). When withdrawing or depositing coins, the sender and recipient must select the same network, and the address must match. Choose the wrong one, and at best you’ll have to go through the hassle of contacting customer support; at worst, your funds may be impossible to recover.
For your first transfer, we recommend sending a small amount as a test. Once it arrives, you can send a larger amount. Fees also vary between networks, so check everything carefully before confirming a withdrawal.
In a nutshell: BTC is the market’s barometer, ETH is the foundation of an ecosystem, and stablecoins are your “dollars” in the crypto market. Understand these three, and exploring other coins will be much easier.
Next time, we’ll talk about the difference between centralized exchanges and on-chain wallets. Which coin do you currently hold the most of? Tell us in the comments.
The content above is for educational purposes only and does not constitute investment advice.
#新手入门 #BTC #ETH #稳定币 #BinanceSquare
The previous few posts covered security, depositing funds, spot and futures trading, and candlestick charts. Now that you’ve got the tools, let’s talk about the three types of coins you’ll encounter most often. No matter what altcoins you explore later, you’ll almost always come across BTC, ETH, and stablecoins. Learn to tell them apart first, and a lot of things will make more sense.
1. BTC (Bitcoin)
Bitcoin was the first cryptocurrency, launched in 2009 by someone using the pseudonym “Satoshi Nakamoto.” Its most important feature is a fixed supply cap of 21 million coins. New bitcoins are gradually produced through mining, and the amount issued is cut in half roughly every four years. The most recent halving was in April 2024.
Many people call it “digital gold,” mainly because its supply is fixed, it’s decentralized, and it has the longest track record. Its use cases are relatively limited, primarily transferring money and storing value.
In terms of market trends, BTC is basically the barometer for the entire market. When BTC takes a big hit, it’s hard for most other coins to avoid the fallout. That’s what we meant in the previous post by “don’t just look at an individual coin—look at the bigger picture.”
2. ETH (Ethereum)
Ethereum launched in 2015. Its biggest difference from Bitcoin is that it can run “smart contracts”—simply put, programs that run on the blockchain. Many of the DeFi projects, NFTs, and various on-chain tokens you hear about today are built on Ethereum or on chains compatible with it.
Any operation on Ethereum requires a transaction fee called a gas fee, which is paid in ETH. Fees can rise noticeably when the network is busy.
In September 2022, Ethereum completed “The Merge,” switching from mining to staking to maintain the network. Also note that ETH doesn’t have a fixed supply cap like BTC—this is something people often get mixed up.
In broad terms: BTC is more like a store of value, while ETH is more like a platform, with ETH itself acting as the platform’s “fuel.”
3. Stablecoins
Stablecoins are designed to keep their price pegged to $1. The most common ones are USDT and USDC. On exchanges, they essentially play the role of “dollars”: you use USDT to buy coins after depositing funds, to place orders, and to convert back into when you sell and want to reduce your exposure to risk.
Major stablecoins like USDT and USDC claim to be backed by reserves of equivalent value, such as U.S. dollars and Treasury bonds. But they aren’t bank deposits, don’t have deposit insurance, and aren’t completely risk-free:
- In March 2023, Silicon Valley Bank in the U.S. ran into trouble. Some of USDC’s reserves were held there, and its price fell noticeably below $1 for a while before recovering.
- UST, in May 2022, fared much worse. It was an algorithmic stablecoin that maintained its price through an algorithm and didn’t have sufficient asset reserves. It eventually collapsed completely, leaving many people with nothing.
So “stablecoin” only means that the coin is designed to have a stable price; it doesn’t mean there’s zero risk. Beginners should stick to major stablecoins and avoid chasing high returns with stablecoins from unknown sources.
4. The Most Common Beginner Mistake: Choosing the Wrong Network When Transferring Coins
The same USDT can be issued on several different blockchains, such as Ethereum (ERC20), TRON (TRC20), and BNB Chain (BEP20). When withdrawing or depositing coins, the sender and recipient must select the same network, and the address must match. Choose the wrong one, and at best you’ll have to go through the hassle of contacting customer support; at worst, your funds may be impossible to recover.
For your first transfer, we recommend sending a small amount as a test. Once it arrives, you can send a larger amount. Fees also vary between networks, so check everything carefully before confirming a withdrawal.
In a nutshell: BTC is the market’s barometer, ETH is the foundation of an ecosystem, and stablecoins are your “dollars” in the crypto market. Understand these three, and exploring other coins will be much easier.
Next time, we’ll talk about the difference between centralized exchanges and on-chain wallets. Which coin do you currently hold the most of? Tell us in the comments.
The content above is for educational purposes only and does not constitute investment advice.
#新手入门 #BTC #ETH #稳定币 #BinanceSquare