A Beginner’s Guide to Cryptocurrency

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Cryptocurrency

Modernization calls for evolution and that means our usual modes of day-to-day habits and exchanges need to change as well.

From newspapers to social media, telephones to mobile phones, router-based internet connections to Wi-Fix and hotspot sharing, humanity has come a long way.

That being said, our mode of monetary exchange continues to evolve as well, and the world is shifting towards cryptocurrency.

Cryptocurrency Simplified

Cryptocurrency is a secured means of digital or virtual transactions that don’t have an actual monetary physical representation. The concept of cryptocurrency is a little complex to understand but it’s a code-based generated currency existing in the form of an encrypted string of data or hash.

Every time one hears about cryptocurrency, Bitcoin comes to mind almost instantly. But crypto isn’t all about Bitcoin and that’s what we’re here for.

It’s true that in the digital monetary world, Bitcoin has existed for as long as the system has existed, and every other individual is aware of it but it’s a currency type rather than being the entire system.

Undoubtedly, it’s easy to get confused given the circumstances of how Bitcoin has populated the minds of high-grade personnel, laymen, and also investors but there’s more to cryptocurrency than Bitcoin alone. You should also know about importance of crypto arbitrage trading, as it is important for trading crypto. There are different categories in cryptocurrency, and we’ll be going through them all.

Types of Cryptocurrencies

There exist two different types of cryptocurrencies namely Coins and Tokens. If you’re feeling worried as to how there is no sign of Bitcoin here, try to catch your breath while we explain what these categories entail.

A coin is a form of cryptocurrency that is built based on its blockchain with Bitcoin being the prime example.

However, there is also another type of coin called Altcoin which is also built on its blockchain but is independent of Bitcoin.

In reality, they are brought up as an alternative to BTC but instead, its value and demand are greatly influenced by Bitcoin.

The other known type is tokens which are given out like a stock offering. It is relatively easier to create, unlike coins that require hours and hours of coding. It also has a variety of uses and is valid with only one merchant.

As mentioned above, there do exist numerous other cryptocurrencies other than Bitcoin alone and you’re going to learn about a few of them along with Bitcoin.

Bitcoin

Bitcoin was the first one to exist as a digital currency created back in 2009. This was officially the birth of cryptocurrency and it’s rather easy to comprehend why people often associate Bitcoin with cryptocurrency as a whole.

Ethereum

As 2021 came to an end and Bitcoin was booming towards the skies, Ethereum was known to be the number two virtual currency.

Unlike Bitcoin, Ethereum is designed as a programmable blockchain and allows the network’s users to do more than just invest, buy and sell.

 It also creates, publishes, monetizes, and uses applications. Not that alone, it has also played a huge part in manifesting new coin offerings and has been an important figure in booming NFT.

Dogecoin

Dogecoin is the infamous joke cryptocurrency. With crypto and specifically Bitcoin booming back in 2013, the meme trend was also booming, and this gave birth to Dogecoin whose initial intention was to only poke fun at Bitcoin.

Later in 2019, a tweet by Elon Musk and his positive perspective regarding Dogecoin was actually what gave it authority and acceptance as a legitimate cryptocurrency.

Tether

One of the biggest reasons why many feel hesitant in investing in the crypto market is its high volatility and unpredictability.

This gave birth to the first cryptocurrency floated in the digital world known as a ‘stablecoin’. This is also known as another crypto type called ‘fiat-centralized stable coins. However, in this situation, the value of Tether is equivalent to the U.S dollar.

Wrap Up

The concept of cryptocurrency, though has been the talk of every other person lately, is still relatively new. To this day, even governmental figures continue to hold meetings, giving crypto experts a chance to explain cryptocurrency to them. With even having an active presence of crypto websites, many people continue to struggle with its trading and the idea of it.

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