What is cryptocurrency:
Step-by-step guide

A cryptocurrency is nothing more than digital ‘coin’ that has a value of its own.

Prashant Rajkhowa
Prashant Rajkhowa • Dec 14, 2022
Last updated: Jan 6, 2023
A depiction of different crypto coins as physical bitcoins.

Think of it this way: Let’s say I take a rectangular piece of paper and write $10 on it. Would you say that piece of paper is now worth $10? I didn’t think so. Now if I take an actual $10 note out of my wallet, you would agree right away that it was worth $10. Another example would be my writing ‘Apple’ on a piece of paper doesn’t make that a single Apple share. But a piece of paper issued by Apple would make it an Apple share.

A digital coin, or a cryptocurrency works the exact same way. The only difference being that instead of a bank, we have a secure network that decides the value of each coin. And just like Apple shares, you can buy and sell cryptocurrencies with other people, which determines their price.

What can I do with cryptocurrency?

Invest in them like shares

You can invest in cryptocurrency to increase in value over time. Apple shares were worth $25 in 2008. 10 years later, each share is worth almost $200.

Cryptocurrencies work in the exact same way. You can choose to invest in them, just like you would shares or property, with the expectation that the price could increase 10 times or 1000 times as some have in the last 5 years.

Buy things

Some cryptocurrencies, like Bitcoin work exactly like currencies do and you can buy things or pay bills with them.

Other cryptocurrencies work like frequent flyer points – in that they have value but only within the network they are issued in. For example, you can use your Qantas Points to upgrade your next Qantas flight seat but you can’t use those points to say, pay your rent.

Cryptocurrencies go a step further and let you sell your ‘points’ to someone else. So rather than have your points expire, imagine if you could sell them to somebody else. You would have made an easy profit because you would have got those points for free (from a previous flight) but would have just sold them for cash.

Where can I get cryptocurrencies?

Broadly, there are 2 ways to get cryptocurrencies, you mine them or you buy them.

Mining cryptocurrencies

This is the equivalent of printing money. It’s like how a country’s federal bank prints currencies notes thereby ‘making money.’

Because cryptocurrencies are not governed by a central authority, like a bank, anyone can use their computers to get onto an individual secure network and make cryptocurrencies. This is called mining and the process involves using your computer power (i.e. processor and electricity) to create new coins.

A cryptocurrency cold wallet.

Buy cryptocurrencies

You can buy cryptocurrencies from a digital currency exchange provider.

These exchanges are similar to the stock exchange that trade shares. You can buy different cryptocurrencies directly with Australian dollars or, if you already own cryptocurrencies then trade those for other currencies or back to Australian dollars. At the time of writing this, there are nearly a dozen different cryptocurrency exchanges in Australia, each with their own costs of buying and selling cryptocurrencies.

Chillur is the only cryptocurrency exchange that has been designed and built for beginners. It simplifies the process of buying cryptocurrency and you can buy bundles of cryptocurrency for as little as $1.

How to buy cryptocurrency in Australia?

You can buy cryptocurrencies through digital currency exchanges. All digital currency exchanges in Australia are regulated by AUSTRAC.

Chillur is an Australian digital currency exchange, registered and regulated by AUSTRAC that simplifies the process of buying cryptocurrency in Australia.

You can buy cryptocurrency in Australia using Chillur in two easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Transfer funds to your account

Use your banking app or web banking to transfer funds to your Chillur account.

Once the funds settle (1-2 business days), the system will automatically buy a bundle of cryptocurrencies for you.

Congratulations! You are now the proud owner of cryptocurrencies in your Chillur account

How to invest in cryptocurrencies?

Investing in cryptocurrencies is the process of buying cryptocurrency today with the expectation that it will go up in value in the future.

Investing in cryptocurrency through the Chillur platform has resulted in returns of 200% after 3 years.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Buy bundles of cryptocurrency

Chillur offers bundles of cryptocurrencies. What this means is that rather than picking and choosing which cryptocurrency to buy and at what price, you are able to buy 10 cryptocurrencies in a go. Chillur handles how much and the purchase price.

Step 3: Track your investment performance

Simply login into your Chillur account and track the performance of your portfolio either through a laptop or your mobile phone.

How do I store my cryptocurrency?

Cryptocurrencies are stored in… wait for it, ‘wallets.’ Wallets are nothing more than specialised storage devices for cryptocurrency. They resemble pen drives or thumb drives but are designed and built only to store one or more types of cryptocurrencies.

Wallets can sit on your computer, your phone or with your service provider.

A cryptocurrency cold wallet.

How did cryptocurrencies start?


The mysterious Satoshi Nakamoto wrote a paper that described a currency supported by a computer network and cryptography. This paper was the source for the concept of the first popular cryptocurrency, Bitcoin.


A year later, people were able to create Bitcoin for the first time by using their computers to join the secure network and mine the cryptocurrency.


The first known, recorded exchange was made where 10,000 Bitcoin were traded for two pizzas. Today, those damn pizzas would be worth $100 million!


New cryptocurrencies emerge. Litecoin being the most well known of that batch.

And the rest, as they say… is history.

How many cryptocurrencies are there?

At the time of writing this article, in 2018, there were 1500 cryptocurrencies. It’s 2022 now and there are over 11,000 cryptocurrencies.

As we mentioned earlier, not all of them are equally popular. The popular ones like Bitcoin are worth thousands, others like Ripple and Cardano are worth under $5 and there are those that are worth less than a cent.

Which are the main ones?

Why do so many people mistrust cryptocurrency?

Negative news coverage

The mainstream news media loves a good disaster. Be it an attack, a hack, a scam or a heist – they love a good scandal. And that’s what ends up get reported about cryptocurrencies. If the only news stories you read are the negative ones, you’re going to believe that everything about cryptocurrency is negative.

While the tech news or the industry news does cover the latest innovation or the latest successful implementation of cryptocurrency, it doesn’t always make it to the TV headlines and that’s one of the biggest challenges in the way cryptocurrency is perceived.

Fear and loathing

Those who are threatened by something new are the first to criticise it. When AirBNB launched, the hotel industry started complaining as if people were wrong in expecting better prices for holiday homes. Similarly, when Uber launched, the taxi industry started rioting because how dare consumers expect to pay lower prices?

And that’s exactly what’s happening with cryptocurrencies, those who fear it the most have the loudest voices and their voices are usually negative.

What does the future hold for cryptocurrencies?

The short answer is: No one is 100% sure.

It is a new technology and with all new technology, there are skeptics. In 1998, no one believe anyone would buy and sell houses, cars or furniture online when placing an ad in the newspaper worked just as well. In 2006, people used to laugh at social networks because no one thought people would ever want to talk to their friends online when they could just as easily talk to them in real life. In 2012, people thought the idea of putting animal ears and noses on your pictures was nonsensical. The reality is that people are still figuring out how to use the technology.

Some predict that it could be the future of internet currency – that you would use cryptocurrency to easily pay for all online services. Others believe they would be just another investment option – like art or cars or sculpture.

The best way to find out just what the future holds for cryptocurrency is to become a part of that journey.