Beginner's Guide to CryptoCurrency: Getting Started
To get ourselves started, we are going to talk about the 2 parts to every Crypto Currency, and the 2 most renowned names in Blockchain: Bitcoin and Ethereum.
Each Crypto Currency has 2 correlating parts: The Protocol/Platform and The Token.
The Protocol or Platform is the basis on which the Crypto Currency operates, otherwise known as The Blockchain. Each Blockchain utilizes complex cryptography to maintain a ledger that documents the ownership of the respective Crypto Currency, as well as accomplishes a specific task. However, despite popular belief... not every Blockchain is designed to be a decentralized means of exchanging goods.
The Token is the means by which one interacts with the Protocol or Platform, and is often a crucial part of it's respective Blockchain. Each Blockchain oftens requires a transaction fee that can only be paid with the respective Token, allowing the up-keep of the platform to be crowd funded by it's users. Essentially meaning... in order to operate on the Bitcoin Protocol, you need the BTC Token... and to operate on the Ethereum Platform, you need the ETH Token.
Bitcoin is a Decentralized Electronic Peer-To-Peer Payment Network, and the Bitcoin Token's primary function is to be an Electronic Currency that is constantly secured and verified via Bitcoin's open-source network. The Bitcoin Token, or BTC, is the front runner of the entire Crypto Currency Market, and is often necessary for the purchase of other, less popular Crypto Currencies. Because of this, Bitcoin's status in the market often effects the USD Value of many other coins. That is to say: If Bitcoin's value drops, other coins will drop, and vice versa. Due to this, it has become very popular for Investors to prioritize the Bitcoin Value of their portfolio over the USD Value. But we'll get more into that a little bit later.
Ethereum is a Next-Generation Smart Contract and Decentralized Application Platform, and is the main pillar of support for the Crypto Currency Market. The Ethereum Token's primary function is to allow users to initiate and navigate through Ethereum's different dApps and Smart Contracts. Ethereum is the platform on which many young Crypto Currencies are being hosted, commonly referred to as "ERC20 Tokens". ERC20 Tokens are created on the Ethereum Blockchain by young Companies in order for new users to more easily integrate into the Company's platform, without the hassle of creating their own Blockchain. This is largely convenient for Crypto Investors, because many Ethereum Wallets will accommodate any ERC20 Token. It has been previously reported that 90% of all Crypto Currencies are ERC20 Tokens, making Ethereum one of the most influential Blockchains of it's time.