Master Cryptocurrency Basics in a Single Day - Botsfolio

Public interest in cryptocurrencies has grown to a point that now it is difficult to find a person who has not heard the word "crypto". Yet, many still do ask: “what is crypto? is crypto safe? Or how cryptocurrency works?” It all started 14 years ago, when Bitcoin laid the foundation for a great financial revolution, we call the “cryptocurrency” today.

Who created the cryptocurrency

Satoshi Nakamoto was a pseudonym using which, in the fall of 2008 a mailing list was created with description of a distributed payment system named Bitcoin - the first cryptocurrency blockchain. The real identity of Nakamoto is still unknown. Perhaps this is not even one person, but a whole group of developers.

Features of Crypto Currency

Cryptocurrencies like Bitcoin (Bitcoin, BTC) are a digital payment system that operates on a peer-to-peer network and allows parties to directly exchange cryptocurrency. Unlike the usual electronic systems in which fiat money functions, such as the euro, dollar, etc., cryptocurrency does not have a physical form.

The most important difference between cryptocurrency and traditional currencies is its decentralization, i.e. no bank or government authority controls the transactions. This is done by independent nodes - each user can launch his/her own node by buying the necessary equipment and downloading the cryptocurrency blockchain.

Cryptocurrency transactions are transparent, i.e. everyone knows about the transactions happening. Therefore, the recipient can easily check whether the payment was made by the sender, because each transfer is recorded in the "journal" of the blockchain.

Security is guaranteed against fraud or theft, thanks to the algorithm that underlies the blockchain, encrypting and recording the data in the transaction so that it cannot be changed, deleted or corrupted.

How Cryptocurrency Works: Blockchain

Cryptocurrency works on the basis of a peer-to-peer system (a decentralized computer network in which all participants are equal). All transactions take place on a blockchain. To understand the concept of a blockchain, think of it as a Novel.

Just as pages from a novel cannot be torn out or replaced without distorting the story, similarly transactions cannot be canceled or corrected. Just as a certain set of pages form a chapter, similarly all transactions sent in the last 10 minutes form a block. Just as each novel is a volume in a series like Harry Potter, similarly all the blocks form a blockchain, with each subsequent block containing information about the previous one. This is what makes the blockchain network so reliable and secure.

When did the first cryptocurrency appear?

The official birthday of cryptocurrency is January 3, 2009. On this day, Satoshi Nakamoto launched the main Bitcoin network and generated a genesis block with 50 BTC.

How to earn Cryptocurrency

The easiest way for beginners is to get free coins on cryptocurrency faucets, as well as through airdrops and bounty campaigns. If you have some money to spare, you can consider trading and mining.

What is Crypto Trading

The process of trading cryptocurrency is identical to trading in traditional markets – you buy cheap, and sell when the price goes up. But there is a significant difference – these markets are much more volatile than traditional ones. Read all about the nuances of cryptocurrency trading here.

What is Crypto Mining

Crypto Mining involves using the fast computing power of specialized computer equipment to create new structures (blocks) in the blockchain, and support its functioning. This activity is rewarded with cryptocurrency coins. Read all about crypto mining in detail here.

Types of cryptocurrencies

In addition to the popular bitcoin, there are thousands of cryptocurrencies that are divided into altcoins (ETH, LTC, EOS), tokens (OMG, REP, SNT) and stable coins (USDT, PAX, USDC), each subspecies of coins has its own characteristics. Also, exchange coins (BNB, KCS, LEO) can be distinguished as a separate type of cryptocurrency.

Altcoins

Altcoins are alternative cryptocurrencies that, in addition to transferring value, offer their users certain solutions that popular cryptocurrencies like Bitcoin do not offer. For example, altcoins such as Monero and Zcash offer anonymous transactions, and altcoins like Dash are easy to handle, have a high speed of asset transfer, and you can send it even without an Internet connection – just via SMS. The Tether stablecoin (USDT) is the U.S. dollar digitally.

Capitalization of Cryptocurrencies

The most important indicator for the cryptocurrency market is capitalization, which reflects the value of all existing coins. Based on this data, a rating of cryptocurrencies is built and decisions are made on the profitability of investing in them. Read all about Exploring Market Capitalization of Cryptocurrency here.

Where to store cryptocurrency

A crypto wallet is a key tool for digital currencies. Its main functions are the storage and transfer of coins, i.e. their sending and receiving. Also, with the help of a crypto wallet, you can buy goods and services, if supported in the payment methods of an online vendor. Read all about cryptocurrency wallets right here .

Buying and selling cryptocurrency

Usually exchangers, exchanges and p2p platforms are used to sell and buy cryptocurrencies. Read all about different ways on how to buy and sell cryptocurrency here.

Regulation of cryptocurrencies

The issue of regulating cryptocurrencies is on the agenda in many countries. Legal regulation of cryptocurrencies is expected to establish rules for the safe storage, purchase and sale of cryptocurrencies. At the moment, there are no single accepted norms of legal regulation of cryptocurrencies in the world, for example, in Japan, bitcoin is a legal means of payment, in China, cryptocurrencies are essentially prohibited (exchanges are outlawed), and in India the status of cryptocurrencies is not defined.

Can you create a cryptocurrency?

Everyone can create their own cryptocurrency, and it is not necessary to have programming skills. Cryptocurrency can be launched on ready-made blockchains, for example, Waves, Ethereum, EOS, NEO, TRON etc.