What are Some of the Most Asked Crypto Questions?

The crypto industry is undeniably complex, even for seasoned investors. Many people in this space have pressing crypto questions without obvious answers. These make up some of the most asked crypto questions, often leaving a lot to be pondered and thought about.

Let's explore some common questions and unpack them. Many of these are fundamental crypto questions that relate to the core elements of the industry, whereas others are common crypto questions that would help traders and users navigate the sector with greater ease and comfort.

These topics are relevant to everyone involved in crypto. It doesn't matter whether you're a newcomer who is just starting out with top exchanges like Binance or Kraken, or an intermediate who knows enough about crypto that they can explore it relatively well.

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Most Asked Questions About Cryptocurrency

Below, you’ll find the answers to some of the most fundamental crypto questions that each beginner should know. It’s basically your foundation for understanding digital assets.

What Are Digital Assets?

So, what are digital assets? Simply put, it's anything of value that exists in digital form. Now, if we were to dive deeper into this term, from a crypto perspective, usually, the value is tokenized. Tokens can represent full or fractional ownership/control and are recorded on a blockchain.

Basically, digital assets are units of value that live entirely online, on blockchains rather than on paper or physical media.^[1] Examples include cryptocurrencies, stablecoins, non-fungible tokens (NFTs), tokenized stocks, in-game items, and even digitally signed documents.

On blockchains, assets are identified by addresses, token IDs, or hashes. In centralized systems, they're tracked by internal records. Learning how keys, wallets, and smart contracts secure these assets answers many common crypto questions newcomers raise about ownership, custody, and risk.

How Would You Explain Bitcoin and Blockchain to a First-Timer?

Bitcoin is the first decentralized digital cash system. Instead of a bank, it relies on thousands of independent computers that agree on which coins belong to whom. When you spend BTC, your wallet signs a transaction that every node checks, preventing double-spending without a central authority.

Those computers store the blockchain - a chronological, tamper-evident ledger where each block links to the previous with a cryptographic hash. Because changing one entry would break every later block, the chain keeps transactions transparent and immutable. No wonder explaining this duo appears in most asked crypto questions for newcomers.

Who Created Bitcoin, and When Was It Launched?

Bitcoin was designed by the pseudonymous Satoshi Nakamoto, who published the white paper: “Bitcoin: A Peer-to-Peer Electronic Cash System” on October 31, 2008. Satoshi’s identity remains unknown, adding an air of mystery that often sparks fundamental crypto questions about trust and origin.

The software’s open-source code went live on January 3, 2009, with the mining of the “genesis block”, embedding a timestamped newspaper headline to prove the date. Satoshi continued contributing through 2010 before fading from public view, leaving the community of volunteers to maintain and upgrade the protocol.

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What Are the Primary Functions of Cryptocurrencies?

At their core, cryptocurrencies serve as permissionless mediums of exchange: you can send value anywhere without relying on banks, PayPal, or borders. Because transactions are settled on a shared ledger, users retain custody of their funds, and fees are often lower than traditional payment rails.

Many networks also act as programmable platforms - for example, Ethereum lets developers deploy smart contracts that power lending, gaming, or supply-chain tools. Mastering how to ask questions about crypto - knowing which questions to ask about a crypto’s security, fee model and real-world utility - helps investors decide whether a specific token merits attention.

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What Is Bitcoin Mining?

Bitcoin mining is proof-of-work (PoW) security for the network. Miners bundle transactions into blocks and race to solve a puzzle. The winner adds the block and earns new Bitcoin plus fees. The block reward halves roughly every four years, now 3.125 BTC. It’s one of the top crypto questions beginners ask.

📚 Track the Next Halving: Here

That said, modern mining uses application-specific integrated circuits (ASICs). Most miners join pools to smooth earnings. Bitcoin adjusts mining difficulty every 2,016 blocks (around 2 weeks) to keep around 10-minute block times. Full nodes independently verify blocks, preserving decentralization even as hardware and pools professionalize the process.

Lastly, security has an energy cost. Cambridge’s CBECI tracks Bitcoin’s electricity demand, which varies with hardware efficiency and hash rate. Profitability depends on the power price, ASIC efficiency, network difficulty, and Bitcoin’s price. After halvings, margins tighten, pushing miners toward cheaper energy and operational efficiency.

What Are the Most Popular Cryptocurrencies?

“Popular” usually means the largest market capitalization. At the moment of writing, the top five are Bitcoin (BTC), Ethereum (ETH), XRP, Tether (USDT), and BNB. That set shows why these appear in many of the most asked crypto questions.

Bitcoin is the first and most valued network. Many view it as scarce digital money. Ethereum powers decentralized apps and tokens. XRP targets fast, low-cost transfers. Tether is a US dollar stablecoin used for trading liquidity. BNB powers the BNB Chain and Binance ecosystem utilities.

However, rankings shift as prices, supply, and liquidity change. Solana (SOL) and USD Coin (USDC) often sit close behind, and stablecoins appear because the market cap is pegged to reserves. For due diligence, pair lists with questions to ask about a crypto use case, token economics, governance, and regulatory risks.

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Most Asked Questions About Exchanges

Now that you know what crypto is and how the major networks work, the next step is getting your first coins. Let’s look at where you can buy crypto, what to check before choosing a platform, and how trading actually works.

Where Can Investors Buy Cryptocurrency?

You can buy Bitcoin and other coins on centralized exchanges like Binance, Kraken, Bybit, MEXC, Coinbase, and BYDFi, among others. They support bank transfers, cards, and sometimes P2P. These are popular starting points in lists of the top crypto questions because they combine liquidity, support, and fiat on-ramps.

Alternatives include decentralized exchanges (DEXs) that connect your wallet directly, and broker or fintech apps offering crypto exposure. Some wallets have built-in on-ramps. Compare fees, supported networks, custody model, and compliance before choosing - fundamental crypto questions to nail down early.

📚 Read More: Best Cryptocurrency Exchange

Can You Buy Crypto Only During Market Hours?

No. Crypto markets run 24/7. You can trade anytime on exchanges; there’s no open or close like stocks. This is one of the common crypto questions, especially for newcomers migrating from equities.

However, your fiat deposit or withdrawal timing can depend on bank rails and card processors. Some P2P methods are dependent on counterparties. Network congestion and maintenance windows can also slow settlement, but they don’t stop trading itself.

At What Time Is the Crypto Market Most Volatile?

Volatility often clusters around major economic releases, large crypto news, and when US markets open.^[2] Daily resets like 00:00 UTC and derivatives events (e.g., funding or expiry times) can also spark moves. Treat these as tendencies, not guarantees.

Liquidity is usually deepest when Europe and the US overlap, yet sharp moves can occur anytime. Use position sizing, stop-losses, and avoid over-leverage during event risk periods.

What’s the Difference Between a Centralized Exchange and a Decentralized Exchange?

CEXs (Binance, Kraken, Bybit) hold custody, match orders off-chain, and typically require KYC. They offer fiat on-ramps, advanced order types, deep liquidity, and customer support - why beginners often start here.

DEXs let you trade directly from your wallet via smart contracts. You keep custody and usually skip KYC, but face wallet management, gas fees, possible MEV, and variable liquidity. Asking “CEX or DEX?” is a fundamental crypto question about control versus convenience.

How Do Trading Fees Work (Maker VS Taker)?

Order-book venues charge maker and taker fees. The former places limit orders that add liquidity and often pay lower fees (sometimes rebates). Takers use market or marketable limit orders that remove liquidity and pay higher fees. Exchanges use tiered schedules based on 30-day volume or token staking.

Beware “zero-fee” pairs that widen spreads, and always check the effective cost: fees plus slippage. VIP tiers on Binance, Kraken, and Bybit can materially reduce costs for active traders.

What Is KYC, and Why Do Exchanges Require It?

KYC (Know Your Customer) verifies identity to meet AML/CFTC regulations, reduce fraud, and enable safer fiat channels. It typically involves an ID document, selfies, and sometimes proof of address. Verified users often get higher limits and access to more features.

DEXs generally don’t require KYC because trades occur on-chain from self-custodied wallets. On CEXs, completing KYC can speed account recovery, reduce scams, and satisfy compliance.

How Do Deposits, Withdrawals, and Withdrawal Limits Work?

Fiat deposits/withdrawals use bank transfers or cards. Speed and fees vary by method and region. Crypto deposits require selecting the right network and address. Some assets need a memo/tag. Confirmations must settle on-chain before funds are credited.

Limits depend on KYC level, risk checks, asset, network, and exchange policy. Expect minimums, network fees, and occasional manual review. Enable 2FA, allowlisting, and withdrawal cooldowns to reduce mistakes and theft.

What Is the Difference Between Spot Trading and Derivatives?

Spot trading is buying or selling the actual asset for immediate settlement. You own the coins, can withdraw to a wallet, and avoid liquidation risk. It’s the base layer for most strategies and a good start for beginners.

Derivatives (futures, perpetuals, options), on the other hand, track the asset’s price and may use leverage. Perps have funding payments; futures and options have expiries. Platforms like Binance and Bybit offer them. Know risks: liquidation, basis, funding, and margin calls before trading.

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Most Asked Questions About Wallets

Buying is only half the journey - you also need a safe place to keep what you own. Next, we’ll cover wallets and keys so you can choose the right setup for everyday spending and long-term storage.

What Is a Crypto Wallet?

This is one of the most asked crypto questions for beginners. That said, a crypto wallet is software or hardware that stores your private keys and lets you send, receive, and manage digital assets. It doesn’t hold coins inside it. Funds live on the blockchain; the wallet proves you control them.

Wallets come as mobile apps, desktop programs, browser extensions, or hardware devices. Good wallets show balances, generate addresses, and sign transactions. Pick a beginner-friendly option first, then graduate to advanced setups as your holdings and needs grow.

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What Is a Bitcoin Address?

A Bitcoin address is like a bank account number for receiving BTC. It’s derived from your public key and is safe to share. Common formats are legacy starting with “1”, P2SH starting with “3”, and bech32 starting with “bc1q”.

Addresses include checksums to catch typos, but always copy-paste and verify the full string. Best practice is to use a new address for each payment to improve privacy. Addresses aren’t usernames. They do not reveal your identity by themselves.

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What’s the Difference Between Custodial and Non-Custodial Wallets?

Custodial wallets are managed by a third party (often an exchange). They hold your keys and sign on your behalf. This is convenient, with easy password resets and customer support, but it introduces counterparty risk and withdrawal limits.

Non-custodial wallets give you full control of private keys. You sign transactions locally and can use a cold wallet like Ledger or Trezor for stronger security.

What’s the Difference Between Hot Wallets and Cold Wallets?

Hot wallets stay connected to the internet - think mobile, desktop, or browser wallets. They’re great for everyday spending and quick access, but the online connections increase phishing and malware risk. Use strong passwords, device hygiene, and two-factor authentication.

Cold wallets keep keys offline. Hardware devices like Ledger Flex, Stax or Trezor Safe 5 sign transactions in isolation, reducing attack surface. Many users keep most funds cold and a small “spending” balance hot. Advanced users may add multisig for extra resilience.

📚 Read More: Hot Wallet VS Cold Wallet

What Are Public and Private Keys?

A public key (and its address) is your shareable “lock”. People use it to send you crypto. The private key is the secret “key” that unlocks funds to spend them. Your wallet uses the private key to create cryptographic signatures that the network verifies.

In addition, private keys must never be shared or stored in plain text. Public keys can be derived from private keys, but not vice versa. This asymmetry enables secure, trustless transfers. Protect the private key with strong backups and, ideally, offline storage.

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What Is a Seed Phrase, and How Do I Back It Up Safely?

A seed phrase (usually 12 or 24 words) is a human-readable backup that can regenerate all your wallet keys. If your device is lost or breaks, you can restore your wallet on a new device using the same words.

Write the seed phrase neatly on paper or, better, stamp it into metal for fire and water resistance. Store backups in separate, secure locations. Never photograph, email, or cloud-sync it. Many wallets support an optional passphrase. Use it only if you can remember it reliably.

What Happens if I Lose My Seed Phrase?

If you still have your working wallet or hardware device, funds remain accessible, but you’ve lost your recovery method. Create a new wallet, move funds, and make a new, secure backup immediately to avoid permanent loss.

If you lose the seed phrase and also lose or damage the signing device, the funds are effectively irrecoverable. There’s no “forgot password” on decentralized networks. Using a passphrase adds security, but losing either the words or the passphrase blocks recovery.

Can I Recover Funds if I Send Crypto to the Wrong Address?

Generally, no. Blockchain transactions are final. If you sent to a valid address you don’t control, recovery requires the recipient’s cooperation. If you sent to an exchange deposit address without the required memo/tag, you can ask their support, but success varies.

Chain and token mismatches complicate things. Sending tokens to a contract that can’t receive them, or to the right address on the wrong network, often strands funds. Therefore, always verify the network, address, and memo before sending.

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How Do Network Fees Affect Sending and Receiving?

Fees are paid to miners or validators to include your transactions. On Bitcoin, fees relate to size in virtual bytes. On Ethereum, fees involve gas units and price in gwei. Higher fees usually mean faster confirmations. Meanwhile, lower fees can delay inclusion during congestion.

Receivers don’t pay to receive, but moving tokens later requires the chain’s native coin for gas. Keep a small ETH balance to move ERC-20s, for example. Techniques like batching, off-peak timing, Replace-By-Fee (Bitcoin), and EIP-1559 gas controls help manage costs.

Is Crypto Safe? Playbook for Beginners

Crypto is neither inherently safe nor inherently dangerous. Safety comes from how you set up, move, and store funds. If you’ve read the sections above on wallets, addresses, and fees, you already know the mechanics. What most beginners need next is a small, repeatable routine that turns good intentions into habits.

Start with the accounts that touch everything else: your email and any exchange logins. Treat them as keys to the castle. Use unique, long passwords managed by a password manager and pair them with app-based two-factor authentication, not SMS.

For storage, divide your money by purpose. A hot wallet (mobile, desktop, or browser) is ideal for small, frequent transactions. Savings belong in a hardware wallet such as Ledger Flex or Trezor Safe 5.

This separation helps you live comfortably without exposing long-term funds to everyday risks like phishing sites or malicious extensions. Whatever you use, back up your seed phrase by hand, clearly and legibly, and store it in two separate, secure places. Don’t photograph it or save it to the cloud.

Sending funds is where most irreversible mistakes happen. Think of each transfer as a short pre-flight check. Confirm the network and the exact token. If a destination requires a memo or tag (some exchange deposits do), include it. For new addresses or large amounts, send a tiny test first; it’s inexpensive insurance.

You might also encounter social engineering - impostor “support” agents, fake airdrops, or links that promise quick wins. Real support won’t DM you first or ask for your seed phrase. Bookmark official sites, type addresses yourself when in doubt, and avoid downloading wallet software from anything but verified sources.

Here is a five-minute safety routine that you can occasionally do:

• Update your device, browser, and wallet;
• Review wallet approvals and revoke anything you no longer use;
• Test your backups: confirm you can locate both seed copies;
• Scan your bookmarks and remove look-alike or unused links;
• Move excess funds from hot to cold wallet.

Followed consistently, these small steps turn “Is crypto safe?” into “I have a process”, which is the safest place to be.

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Conclusions

These are some of the most asked crypto questions in the market. Some of these get asked on forums as a matter of urgency, and others get asked in social circles or between individual people, as they are more contemplative and thought-provoking. But overall, they are all top and fundamental crypto questions.

Of course, these are just a small selection of the most asked crypto questions. Every reader probably has a myriad of other pressing and common questions, but these are a good jumping-off point for anybody who wants to know more about the crypto industry. In reality, there is an endless stream of questions to ask about crypto, as the industry is regularly updating and evolving, and so the most asked crypto questions will always change.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Toygar A., Rohm T., Zhu J.: 'A New Asset Type: Digital Assets';

2. Liu J., Serletis A.: 'Volatility in the Cryptocurrency Market'.