Tempted with Crypto? – Know the Basics of Cryptocurrency

Back in mid-90’s, we started asking “what’s the Internet?”. Thirty years later we are asking, “what’s a cryptocurrency?” Let’s understand Crypto.

Cryptocurrencies have become a new alternative asset in the eyes of the public. Given the rise of cryptocurrency last year, we must embrace this new wave of investment and capitalize on the potential gains. The concept of digital currencies can be daunting for investors accustomed to traditional instruments such as stocks, bonds, commodities, and real estate.

If you want to learn how to trade cryptocurrencies, you have found the right place. The mountain of information available on the Internet can overwhelm anyone, even experienced dealers. To help you, we have created a detailed guide to beginner cryptocurrency trading, updated for 2021. In this article, you will learn everything you need to start dealing with digital assets – cryptocurrency. There’s a lot to discover in this guide, so let’s dive in.

What are cryptocurrencies?

Cryptocurrencies are digital currencies that can be used as an investment or as a means of payment for goods and services. Essentially, it is a sequence of alphanumeric characters in a programming language. What makes crypto unique is that people can pay astronomical sums for it.

A decentralized public register comprises a network of computers that record transactions and provide buyers with proof of authenticity and ownership. Unlike a public log, it is not controlled by a single user or entity. Instead of having your traditional regulators, such as central banks, accountants, or lawyers, cryptocurrency relies on computers that act as nodes, validators, and miners. The complexity of layers of encryption and hashing makes crypto invariable and challenging to hack. Each cryptocurrency you buy has a unique signature that makes it possible to trace and verify the property.

Is it safe & secure?

It refers to a method of protecting information through code. With blockchains, there are two ways to do this: algorithm encryption and hashing. A blockchain is protected by a set of keys generated by an algorithm. Instead of a key service forming a key to unlock the information, we have the reality of an encryption key in the blockchain created by the algorithm. As this key is based on mathematical formulas even the most powerful computer in the world would take more than a trillion years to hack the key.

Hashing is a mathematical algorithm that converts input into a unique fixed-length output. It is being done to provide another layer of security to a blockchain. Some companies use hashing to store your password in their database if the system is hacked and your actual password is not compromised.

Technology that backs Crypto Currency

The answer to your question is blockchain and cryptography. Before we get into cryptography, we need to talk about the technology behind crypto. Simply put, encryption with hashing complements the decentralized technology of the blockchain. Servers distributed across many computers record and validate everyday transactions with a particular digital currency. By 2021, there will be one million Bitcoin miners worldwide.

Imagine you have layers of security intertwined with millions of servers. Imagine you’re in a class of 40 and want to work with students to cheat a test. This is not an easy task. The idea behind blockchain is that cryptography gives investors a stronger sense of security than ever before.

Types of Crypto currency

In general, a coin is used as a means of payment. Most cryptocurrencies can be identified as either coins or tokens. There is no single way to classify all cryptocurrencies. There are three main types of cryptocurrencies.

1. Bitcoin

It has a market capitalization of $17.276 billion, more significant than any other cryptocurrency variant. It was the first cryptocurrency to be introduced and is considered digital gold. The units of Bitcoin are divided into Satoshi’s, which are equivalent in relation to rupees and paises. The Bitcoin network is designed to have only 21 million Bitcoin units in circulation at any one time. The market for Bitcoins currently stands at 18.39 million. This limited availability is the main component that drives bitcoin’s market price.

2. Altcoins

Altcoins differ from Bitcoin and use different algorithms. Some notable old coins are Ethereum, an old coin, Factor, Litecoin, NEO, etc. There are more than a thousand old coins worldwide. This category includes bifurcated or alternative versions of Bitcoin, hence the name. For example, Ethereum altcoin is not a currency, but a platform for companies to build their apps based on blockchain.

3. Tokens

However, compared to the other two types mentioned above, tokens are extremely low, as we can only use them to buy items from such decentralized apps or daps. Products of old coins such as Ethereum and NEO. There is no separate blockchain to run the decentralized apps created by such old coins.

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