Basic Cryptocurrency Understanding For Students II.............10% beneficiary to campusconnectng
Well I had earlier written on this and it's my wish to continue from were I stopped last time to continue to provide useful information on cryptocurrencies to all students there, as we talked about what cryptocurrencies are, what are blockchain and why crypto is valuable now we will be looking into more things related to cryptocurrencies.
We have different types of cryptocurrencies, indeed they come in various varieties for one new to the space or who doesn't know much hearing about crypto seems like it's just the same thing just like our normal currency are all the same, but when it comes to crypto one thing separates from from the other.
BITCOIN: This is the first cryptocurrency to be created and was created for the purpose of serving as a decentralized form of payment, yes created by Satoshi Nakamoto in 2018 for the purpose of making online payment possible between two parties without going through any financial institution.
Bitcoin has a fixed supply or amount of token that will ever exist making it a rare asset because there will only ever be 21,000,000 bitcoin in circulation and every four years bitcoin undergoes a halving event further reducing it's supply and making it more scare and hence increasing it's value such is the nature of bitcoin running in a proof of work consensus mechanism.
Ethereum: This is the second cryptocurrencies to be created after bitcoin and second most popular, the ethereum blockchain serves as a platform for building of other decentralized application and enables smart contract executions the main goal of this network is basically so everyone or anyone from any part of the world could easily build and run software on the blockchain, it aims to be a global platform for decentralized application.
Ethereum runs on proof of work like bitcoin but work is in place to migrate from the proof of work consensus mechanism to the much better proof of stake which will increase it's scalability and efficiency and if perfectly implented could provide the solution to the trilemma with the ethereum blockchain being both scalable, secure and decentralized.
STEEM: This is a blockchain network that provides users with a platform where they can post quality and original contents and gets curated and be paid with cryptocurrency.
It is the first decentralized social media platform and enables users to post and interact with each other to be able to earn in return and return and the blockchain actually leverage on cryptocurrencies and the social medial technologies to be able to inturn provide it's users with value.
Ofcourse this is the type of cryptocurrencies we have amongst host of others and when we talk about different types of cryptocurrencies we normally jst say bitcoin and altcoins. Bitcoin first then any other cryptocurrencies is grouped under altcoins.
We have host of altcoins in the market if fact apart from Bitcoin other cryptocurrencies are altcoins and altogether the altcoins capture atleast 40% of the total crypto market cap.
Stable Coin: The crypto market is a highly violatile market hence the creation of this type of coin, the stable coins is aimed at reducing the much violatility in the crypto market and this is so because the stable coins are crypto assets that are pegged to a more stable asset like the USD.
The stable coins unlike other crypto assets is hardly affected by market conditions and have a fixed value that of the USD. Examples of this type of stable coins are the Usdt,Usdc and Busd which are pegged to the us dollars and are mostly used for storing funds and trading against other crypto asset.
Utility tokens: This is a type of cryptocurrency token used for paying for blockchain transaction and it's functions they are used for serving a particular purpose and are of great use to the blockchain just like ethereum ether and cardano's Ada can be seen as utility token.
Governance Tokens: This are types of tokens which vest voting power upon the holders of this token. Developers create this token in other to allow those who hold this token to make decisions in a decentralized manner and enable users to have a say in the future of the protocol just like uni is the governance token for ethereum based defi platform uniswap
Security Tokens: This type of token are digital contract that represents the real asset of an institution or company and the value of this asset depends on the external tradable asset and is usually under regulation just like traditional securities for ownership to be confirmed and there is alot of procedures and legal work even the presence of middle man but in this case all this procedures are been done on the blockchain though it is being regulated by the authority.
Meme Coin: These type of coins have little or no use-case and it's usually a community driven token and most times hypes by the community members and others are usually what drives the price and as the name suggest this are coins made as a joke or for fun in the crypto space like doge coin, baby doge, shiba inu etc.
Privacy Coin: This coin is created to give the users annonymity, yes is made for users to transact annoymously in the blockchain and hide identity of it's users by giving them a safe and private space for transaction without anyone knowing e.g of privacy Coin is Monero and Zcash
When we mention defi in cryptocurrency it should be worth noting that we are infact referring to decentralized finance so defi is the short form of it and every defi transaction is recorded and validated on a blockchain and the decentralized finance facilatate exchanging of cryptocurrencies among two parties which could be for payment, securities trading, insurance transactions as well as lending and borrowing.
Often when we talk about wallet normally it's where we keep our physical cash while walking around and incase we need to buy something we dip our hands in it and take out some cash to purchase something, now how about crypto wallet.
A crypto wallet is a place where we store our cryptocurrencies only this time it is digital mostly and not physical though we also have cold wallet. A crypto wallet enables the sending and receiving of cryptocurrencies, yes it's from our wallet that we carry out this transactions.
Now we mostly have heard of the term private key, this key is accompanied by crypto wallet because we are given a set of private keys when we open a crypto wallet and it is this keys that enable us to access our account yes whoever has access to the key owns the account and this private keys are a bunch of cryptographic character that acts as a password.
Well amongst other digital tradable asset the crypto market is highly violatile and is not a place where people who are inexperienced are advised to venture it's a very crazy and volatile market that could turn one millionaire over night and render one homeless as well for those who choose to invest their very means of life without risk assessment.
The market actually is driven as a whole by the bitcoin halving cycle as every which happens every 4 years and is accompanied often by a surge in the price of bitcoin resulting in it breaking previous all time highs and during this period as bitcoin is surging it usually drags other cryptocurrencies along with it to new highs
We normally call or refer to this period as the bull market then after a period of a year or two after the halving the price of bitcoin we start moving in a downtrend and the rest of the cryptocurrencies we move along with it, little wonder when we talk about cryptocurrencies we most often have bitcoin in mind while the rest are called altcoins.
Now like every other assets news also play a key role in the fluantuation of cryptocurrencies but when it comes to crypto assets being too volatile that is associated with it having less liquidity it is true crypto is gaining mass adoption but they aren't really big and so many institutions buying and holding it just like gold or other indexes or bonds but ofcourse with time it will gain mass adoption.
Ofcourse cryptocurrencies are indeed a unique asset and when we look for buying opportunities we should always look at assets that we know that will stick around for much longer like bitcoin for instance, a crypto asset that has strong fundamentals and has proven overtime that it won't just die out like so other projects so in all we should invest wisely and shouldn't by a coin just because someone advise us to.
Thank you, @favrite for making this quality post in our community today.
We hope to read more of your quality contents
Please sir @pelon53 it appears you mistakenly skipped my post
No la he omitido, estoy esperando que la comunidad verifique tu post
Nice one there