Frequently asked questions
Twenty questions people in Europe often ask about crypto, from what a smart contract does to what to do when you sent coins over the wrong network. Each answer starts short and then goes into the detail, with sources.
By PlatformCrypto.eu editorial team · Last checked on
01 · 5 questions
What smart contracts, DeFi and NFTs are, what the bitcoin halving changes and what market cap does and does not tell you.
A smart contract is a piece of software stored on a blockchain that applies its own rules automatically once the agreed conditions are met. No company approves each step, and a completed action cannot be reversed. Tokens, decentralised exchanges and NFTs are all built from smart contracts.
DeFi, short for decentralised finance, is the name for financial services that run as smart contracts on a blockchain. You swap, lend or borrow straight from your own wallet, with no company holding your funds, and no company to turn to when something goes wrong.
An NFT, or non-fungible token, is a token on a blockchain that cannot be swapped one for one with another, because each one is unique. It records ownership of something, such as a digital artwork or a ticket. The file itself is usually stored somewhere else.
The halving is the moment the reward for adding a new block to the Bitcoin blockchain drops by half. It happens every 210,000 blocks, roughly every four years. The most recent one took place on 20 April 2024, cutting the reward from 6.25 to 3.125 BTC per block.
A coin's market capitalisation, or market cap, is its price multiplied by the number of coins in circulation. It tells you how large a coin is relative to others. It does not tell you what the coin is worth, how much money is behind it or whether it is cheap.
02 · 5 questions
What you pay the network, how to look up a transaction and what to do when you picked the wrong network.
A layer 2 is a network that runs on top of another blockchain, usually Ethereum. It processes transactions itself and posts a compressed record back to Ethereum, so users pay far less per transaction while the main chain still anchors the result.
Gas fees are the charges a blockchain such as Ethereum collects for processing a transaction, paid in the network's own coin. Each operation uses a fixed amount of gas, and the price per unit rises and falls with demand for space in the next block.
A wrapped token stands in for a coin on a blockchain where that coin does not exist natively. WBTC, for example, represents bitcoin on Ethereum: real bitcoin is held in reserve and tokens are issued against it. You hold a claim, not the original coin.
A blockchain explorer is a website that shows everything recorded on a blockchain: transactions, addresses and blocks. Paste in a transaction ID and you can see whether your crypto was sent, how many confirmations it has and what network fee was paid.
It depends on where the coins landed. If the receiving address also exists on the other network and you control it, you can often recover them yourself. If they went to an exchange, its support team may help. Coins sent to an address nobody controls are usually lost.
03 · 5 questions
Why prices differ between platforms, how exchanges and brokers work, and what you can buy with how much.
Every exchange runs its own market with its own buyers and sellers, so prices drift apart slightly. On top of that, platforms add a spread, trading fees and payment charges in different ways. The quoted price tells you little; what counts is how much crypto you end up with.
On an exchange, your order is matched with other users' orders in a public order book. A broker sells you crypto directly at a price it quotes itself. Exchanges usually charge a visible trading fee; brokers tend to build their margin into the price.
A limit order is an instruction to buy or sell crypto at a price you set, or better. If the market never reaches that price, nothing happens. A market order, by contrast, executes immediately at the best price currently available in the order book.
Yes. Bitcoin is divisible to eight decimal places, and the smallest unit, one satoshi, is 0.00000001 BTC. On an exchange you simply choose how many euros to spend and receive the matching fraction of a bitcoin.
Yes. All seven MiCA-licensed platforms in our comparison accept credit and debit cards. Paying by card is quick but usually costs more than a SEPA transfer or an existing euro balance, with surcharges ranging from zero to a few per cent of the amount.
04 · 5 questions
Why platforms check who you are, what the EU rules require and how to protect your crypto.
Because EU law requires it. Crypto-asset service providers, like banks, must identify their customers to prevent money laundering and terrorist financing. This check is called KYC, know your customer, and a licensed exchange cannot let you trade or withdraw until it is done.
The travel rule requires crypto service providers to send the name and details of both sender and recipient with every transfer. In the EU it has applied since 30 December 2024, with no minimum amount. Above €1,000 to your own wallet, the exchange must check that the wallet is really yours.
A white paper is the document in which a project explains what its token is and how it works. Under MiCA it has also become a legal disclosure: anyone offering a crypto-asset to the public in the EU, or seeking admission to trading, must publish one with set contents and notify it to a supervisor.
A seed phrase, also called a recovery phrase, is a list of usually 12 or 24 English words generated by your wallet. Every key in the wallet is derived from it. Lose your phone or hardware wallet and the words restore everything; let someone else see them and they can take your crypto.
Act quickly: secure whatever is left, alert your exchange and report the theft to the police in your country. Nobody can reverse a blockchain transaction, but an exchange that receives stolen funds can sometimes freeze them. Be very wary of anyone offering to recover your crypto for a fee.
Some topics have a guide of their own. Which exchanges hold a licence under the EU's crypto rules, and who supervises them, is on our list of MiCA-licensed exchanges. What the new reporting duty means for your tax authority is explained on the DAC8 page. If you would rather hold your coins yourself, start with our guide to choosing a crypto wallet.
Wondering why a big name is missing from our comparison? We only list platforms whose authorisation we found in ESMA's register, which is why you will not find Binance; the licensed alternatives are set out separately. How we check licences and calculate costs is described in how we compare.
These answers are general information, not personal financial, legal or tax advice. Please also read our disclaimer.
%22%2F%3E%3Cpath%20stroke%3D%22%23fff%22%20stroke-width%3D%2210%22%20d%3D%22M30%200v30M0%2015h60%22%2F%3E%3Cpath%20stroke%3D%22%23C8102E%22%20stroke-width%3D%226%22%20d%3D%22M30%200v30M0%2015h60%22%2F%3E%3C%2Fsvg%3E){kind=small}