As the name suggests, cryptocurrency (crypto for short) is a digital form of money, solely existing online, built using blockchain technology and cryptographic techniques.
Cryptography - The study of secure communication techniques permitting the sender and intended recipient alone to view a message.
Currency - a method of payment for goods and services usually issued and backed by governments, monarchy, or banks.
- 1.It uses encryption techniques such as public-private key pairs and hashing functions to authenticate and protect transactions.
- 2.It does not exist in a physical form and is generally not issued by a central authority.
- 3.It is a form of digital asset most commonly secured on a decentralized ledger and distributed across many computers.
- 4.It enables secure online transactions without the use of a third party.
- 5.It can be purchased from cryptocurrency exchanges or earnt through mining and staking.
- 6.It is nearly impossible to counterfeit due to encryption and decentralization.
- 7.It exists outside the control of governments and central authorities such as banks.
- 8.It is a popular trading commodity.
- 9.It is programmable. This means that it can be programmed to do more complicated financial transactions in an automatic and secure way.
- 10.It is booming with over 10,000 currencies in existence today.
Coin - An asset that uses its native blockchain network and is used in such as a means of exchange or utility.
Altcoin - An alternative coin, referring to a cryptocurrency other than Bitcoin.
Token - An asset that is usally created on an already existing blockchain and theoretically only serves as a utility token.
Stablecoin - An asset where the price is pegged to a traditional currency like the USD$.
Is the letters after each digital asset’s name, like ZINN, usually it's 3-4 letters but it can be more. Most exchanges refer to coins and tokens by their ticker, not their full name.
The surge in popularity of cryptocurrencies has resulted in many ways to buy them. Brokers and centralized or decentralized exchanges are easily found through a quick internet search, and even banks have got in on the action.
Cryptocurrency can also be earned by mining. The blockchain is downloaded, and computing power is used to process transactions and verify blocks, earning a cryptocurrency reward for the work done. Similarly, you can acquire crypto by purchasing currency and locking it up for a period, giving you voting rights on blockchain protocols and block verification; this process is known as 'staking.'
Cryptocurrencies offer new possibilities for financial freedom away from the mainstream institution's archaic systems currently used. The ability to complete transactions faster, cheaper, across boundaries, directly peer-to-peer and in a single currency is set to revolutionize how we conduct monetary processes. However, it is not only the financial benefits of cryptocurrencies that are being explored but the practical advantages too. As more and more altcoins are created to tackle real-world problems such as power-sharing and data storage.