crypto currency basics trading exchanges nft - Cryptocurrencies - the basics

Cryptocurrencies - the basics

Let's dive into cryptocurrencies and its basics

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Posted by marzia on 3rd July 2022





What is Cryptocurrency


A digital/virtual form of currency that uses cryptography to secure transactions.

A digital currency is created to work as a medium of exchange through a laptop network that isn't dependent on any critical authority, consisting of a government or bank, to uphold or maintain it.



Jan (2009) the first iteration of the first decentralized digital currency (bitcoin) logo image  (Satoshi Nakamoto)



  • Crypto uses of a decentralized system to document transactions & issue new units without facing regulation authority or central issues.
  • The benefits of cryptocurrencies are inexpensive and faster cash transfers and decentralized systems that do not collapse at a single point of failure.
  • Cryptocurrencies empower you to buy goods and services, or you can trade them for profit.
  • The disadvantages of cryptocurrencies are their price volatility, high energy consumption for mining activities, and use in some criminal activities.


User coin ownership records are reserved in a digital ledger, a computerized database using strong cryptography to secure transaction records, control the formation of additional coins, and verify the transfer of coin ownership.



Where can we get cryptocurrency?

Cryptocurrencies can be mined or acquired from cryptocurrency exchanges.

For example:

  • Binance  
  • Coinbase  
  • OKX
  • KuCoin
  • tons of others (be sure they are trusted, google around a bit).


Can crypto be used to make a purchase?

Several companies have begun accepting cryptocurrencies in exchange for their products and services, even though it is not a widely used payment method. Cryptocurrency is steadily becoming a mode of transaction in online purchases.

Now not all e-commerce sites allow purchases the use of cryptocurrencies. Cryptocurrencies, even famous ones like Bitcoin, are rarely used for retail transactions.

But, the skyrocketing fee of cryptocurrencies has made them popular as trading gadgets. To a constrained volume, they're extensively utilized for go-border transfers.

                                 

Can crypto be traded?

Yes, cryptocurrency is a tradable digital asset or digital form of money built on blockchain technology that only exists online.

                                             

Is it safe to trade with crypto?

Cryptocurrencies use encryption to authenticate and guard transactions. Make sure you trade and hold your crypto on a platform that offers robust security measures, including having a significant amount of holdings in its cold storage and using two-factor authentication for users.


What are Coins, altcoins, shit coins, and tokens in the crypto market?

Coin :

A coin is any cryptocurrency that makes use of its impartial blockchain

As an example:

Bitcoin is considered a “coin” as it runs on its infrastructure.

                                           

Altcoins:

Other forms of currencies in digital the world that are not Bitcoin are collectively referred to as alternative cryptocurrencies or altcoins.

For example:

Ether is operated via the Ethereum blockchain.


Shitcoins:

A cryptocurrency with little value or a digital currency with no immediate, discernible purpose.    

A cryptocurrency that, according to one's subjective opinion, is a wrong investment choice.            

  Example:

1.   Shiba Inu is a shit coin.


Stablecoins:

A stablecoin is a group of cryptocurrencies that   strive to offer price stability and are backed by a reserve asset.

For example:

Tether (USDT)   


Tokens:

Tokens also are digital assets that can be purchased and sold. However, tokens are non-native assets that use every other blockchain infrastructure.

These include Tether, which is hosted on the Ethereum blockchain. Others have TerraUSD, Chainlink, Uniswap, and Polygon.


Non-Fungible Tokens (NFTs):  

NFTs are tokens that primarily work as collectibles. Users can create NFTs for anything, including art, baseball, virtual real estate, dresses, event tickets, etc.

For example:

1.   Nyan Ca t NFT  sold for $590,000  in an online auction


2.   Jack Dorsey’s first tweet


 

The NFT of the tweet sold for nearly $3 million in  March 2006.

Difference between coins, altcoins & tokens in the crypto world:

Coin

Altcoin/Shit coin

Tokens

Use its blockchain

use a different consensus mechanism to produce blocks

Tokens can eventually become coins when the project develops a blockchain

Although Bitcoin is volatile, it's the market leader

4.   gained substantial value

Risky & according to a specific class of users, it’s a bad investment.

It is less expensive to create a token; it can be profitable

 And also have a higher chance of failure.

E.g.:  Bitcoin

E.g.: Doge, Shiba, XRP

E.g.     Chainlink, Uniswap,

 

Is cryptocurrency legal?

Despite its use for buying goods and offerings, there are still no   constant global legal guidelines that modify Bitcoin. Many evolved countries allow Bitcoin to be used, along with the U.S., Canada, India, and the U.K.


Which country first legalized crypto?

In September last year, El Salvador  became the first country to introduce Bitcoin as a legal tender.

     

Can We Generate Cryptocurrency?

Cryptocurrencies are generated by mining.

For example,

 Bitcoin is generated using Bitcoin mining. The process involves downloading software containing a partial or complete story of transactions in its network. Though everyone with a laptop and an internet connection can mine cryptocurrency, the power- and resource-in-depth nature of mining way that big corporations dominate the industry.


The future of cryptocurrency:

Analysts estimate the global cryptocurrency market will triple by 2030, hitting a nearly $5 billion valuation.

  KEY TAKEAWAYS:

  •   A cryptocurrency is a digital asset based on a community distributed throughout various computers. This decentralized structure permits them to exist out of doors the management of governments and imperative government.
  • Specialists agree that blockchain and related technology will disrupt many industries, including finance and law.