In this chapter, you dive right into blockchain technology. You purchase your first cryptocurrency and find out how to exchange it for other currencies. You set up special applications that will give you access to a whole ecosystem of decentralized applications (known as dApps). You also set up a secure environment to use your cryptocurrency, and create and lease out digital blockchain assets through a blockchain game.
This chapter provides you with an understanding of many of the basic functionalities that blockchain technology offers. You also develop a basic understanding of some of the additional security you need to have while working with cryptocurrency. And you begin to establish the basic crypto accounts that you need in later chapters.
Diving into Blockchain Technology
The Ethereum blockchain is one of the largest and most powerful blockchains in the world. It was designed to build dApps, which are applications that are built within a trustless, decentralized network. Within the Ethereum network, developers utilize smart contracts to build these applications. Ethereum also utilizes a cryptocurrency called Ether to reward users for providing computing power and creating the trustless system that these smart contracts need in order to execute.
Smart contracts are not really like a typical business contract. Instead, smart contracts are code deployed across a decentralized network. Like a business contract, they have predefined terms. A key difference is that smart contracts are enforced by their blockchain network. They’re an important computing innovation because they allow individuals who don’t know or trust one another to collaborate without fear that the other party won’t perform as outlined by the terms that the two parties have agreed on.
In the following sections, you set up accounts to purchase your first Bitcoin. You also exchange some of the Bitcoin you buy for Ether so you can utilize Ethereum dApps in the following sections.
Creating a secure environment
You first need to create a secure environment to work online. A growing number of reasons exist for you to think about using a secure browser and a virtual private network (VPN); they prevent your data from being collected without your consent and help to avoid hackers. The average user can be targeted by hackers when using cryptocurrency and an unsecured Internet connection.
In this section, you download the Brave web browser, ProtonVPN, and a MetaMask browser extension. You can use all three of these services without paying. However, they also offer improved service for a fee.
Downloading and installing the Brave browser
Brave is a new Google Chromium–based secure web browser that is fast, open source, and privacy focused. It blocks advertisements and trackers, and has a feature that lets you reward publishers that you like with tokens. Internet pioneer Brendan Eich created Brave; he also invented JavaScript and co-founded Mozilla.
To download the Brave web browser, follow these steps:
1 Go to https://brave.com.
2 Click Download Brave.
3 Go to your downloads folder.
4 Double-click the Brave browser file.
5 Drag and drop the new Brave browser icon to your applications folder.
Now that you have a more secure web browser, you can add the blockchain extension to it that allows you to explore decentralized applications.
Downloading and installing ProtonVPN
ProtonVPN is a VPN run by a Swiss company. When you use ProtonVPN to browse the web, your Internet connection is encrypted so any would-be attackers can’t eavesdrop on your activity. It also allows you to access websites that may be blocked.
To download ProtonVPN, follow these steps:
1 Go to https://protonvpn.com.
2 Click Get ProtonVPN Now.
3 Click Get Free.
4 Enter your email address when prompted.
To install ProtonVPN, follow these steps:
1 Go to the download folder on your Mac or PC.
2 Double-click the ProtonVPN file.
3 Drag and drop the new ProtonVPN icon to your applications folder.
A VPN is a good second layer of security to help make sure that your connection is secure. To find out more about how you can protect yourself and your devices, check out Cybersecurity For Dummies by Joseph Steinberg (John Wiley & Sons, Inc.).
Downloading, installing, and securing MetaMask
MetaMask is a browser extension that allows you to run Ethereum dApps right in your browser without running a full Ethereum node. (Ethereum is one of the largest blockchains in the world; see Chapter 5 of this minibook and also Book 4 for more information.) MetaMask includes a secure identity vault. It allows you to log into websites, manage your identities on the web, and sign blockchain transactions. You can also keep some Ether cryptocurrency in your MetaMask wallet to make payments online.
To download and install MetaMask, follow these steps:
1 Open the Brave web browser.See the section, “Downloading and installing the Brave browser,” earlier in this chapter if you haven’t installed it already.
2 Go to https://metamask.io.
3 Click Download.
4 Click Install MetaMask for Brave.
5 Click Add to Brave.You now see a small puzzle-piece icon in the upper-right corner of your Brave browser. When you click that puzzle piece, click the pin icon, which will make accessing MetaMask quick and easy. You now see a little fox icon at the top right of your Brave browser screen.
Because MetaMask is a wallet, you need to secure and back up your wallet with a strong password and secure your backup seed. A backup seed allows you to recover your wallet if you lose your password.
Grab a pen and notebook or a piece of paper that you can keep private. Then follow these steps:
1 At the top of your piece of paper, write “MetaMask,” “Brave browser,” the date, and the device you’ve downloaded it to.
2 Open the Brave web browser.
3 Click