Cryptocurrency Overview

Before rushing in, let's have a quick introduction to what cryptocurrency is?

What is Cryptocurrency?

Cryptocurrency is a new kind of digital money that you can use to buy things online, and you can send it instantly to other users anywhere in the world, at a very low cost, needing nothing more than a smartphone and an internet connection.

Cryptocurrency can be cheaper and more convenient than many existing services and legacy payment systems like PayPal, Visa, or Mastercard if - for example - you regularly send money overseas. Several million people are actively using it today for that purpose.

Cryptocurrencies vary from coins to utility tokens, for instance, Bitcoin (BTC), Ethereum (ETH), Binance coin (BNB), PayBolt ($PAY), etc. And they also vary in regards to the blockchain they are built on such as ETH, BNB Chain, Polygon, etc. and based on the blockchain, crypto is working with the network-related; for example, ERC20, BEP20, TRC20, etc. on the other hand, there are also some stable coins, like USDT, USDC, and BUSD, that are “pegged” to the value of certain fiat currencies, like USD.

Cryptocurrencies are stored in your wallet and work with the related network to let you send and receive payments without the risk of fraud and chargebacks. You own your digital assets by keeping track of a private key. It's a digital unique signature that no one can forge or fake. Because you're the only one who owns this signature, there is no reset or recovery without your private key. You have total control and total responsibility.

Instead of entering all of your personal information when you pay, usually, all you need to do is scan a QR code or copy and paste a string of letters and numbers to buy something with bitcoin. Then, with a swipe or the press of a button, you can send funds to anyone anywhere in the world in minutes.

Besides functioning as a new type of internet money, cryptocurrency is also a very popular form of investment, with eye-popping long-term appreciation.

If you are enjoying this and would like to a deeper dive, continue reading:

Bitcoin: A Protocol, a Network, a Ledger, an Asset

Bitcoin is a protocol for transferring value over the internet. It involves a network of thousands of computers around the world verifying transactions in a shared ledger. Bitcoin miners use an incredible amount of computing power to secure those transactions and make sure they are authentic. Because people trust this expansive network of computers and the incredible computing power of the bitcoin miners, they see bitcoin as valuable and an asset.

Protocol

Protocol can be an intimidating word. But you've been using at least one for years now. You got to this page using a protocol called HTTP or HyperText Transfer Protocol. It's how computers and smartphones talk to servers and retrieve web pages.

The Bitcoin protocol is a set of rules that allow a massive distributed network of people and computers to agree on the accuracy of a record of transactions.

Network and Ledger

Governments that issue currencies go to great lengths to prevent counterfeiters from making and spending fake physical money. There is a similar problem for any kind of digital money, whether it's a cryptocurrency, a credit card transaction, or a bank transfer. How can the people you pay know that you aren't trying to spend the same funds twice?

To solve this problem, banks and credit card companies maintain massive centralized transaction ledgers to keep track of how digital funds change hands. Those ledgers work for some kinds of payments. However, because they're centralized in the hands of one group of people, they can be lost, accidentally changed, purposefully manipulated, or destroyed.

Bitcoin solves the problem of fraudulent double-spending in digital payments. And it solves that problem without the weaknesses of a central transaction ledger. Instead of relying on one bank, company, or government to maintain a fair, transparent ledger of transactions, Bitcoin relies on a massive global network of computers. That network of computers is the Bitcoin network, and the computers are called Bitcoin "miners".

Bitcoin miners solve special mathematical problems to add transactions to Bitcoin's shared, public transaction ledger, called a "blockchain." The amount of computing power required to solve these mathematical problems is breathtaking. A single human being cannot complete just one of these mathematical puzzles by hand in a full day. The bitcoin network completes a little over 5,000,000,000,000,000,000,000 every second.

Once a miner adds a group of transactions to the Bitcoin blockchain, other computers in the Bitcoin network called "nodes" all update their full copies of the Bitcoin blockchain. This is Bitcoin's built-in protection against fraudulent double spending and manipulation of transaction history. The miners will not add double-spent transactions to the Bitcoin blockchain. And since so many nodes have copies of the true blockchain, no one can trick the rest of the Bitcoin network into using a fake, edited, or corrupted version.

Asset

Because Bitcoin's blockchain provides the world's most secure ledger for transactions – or for any kind of record – many people value the tokens for using the Bitcoin blockchain. Those tokens are what you probably think of as "bitcoin." They're the bitcoin you have in your wallet. Since 2009, millions of people have bought, sold, saved, invested, and shopped using this digital asset, just like they would with dollars or euros.

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