Cryptocurrency aka Digital currency is a web based mode of trade which utilizes cryptographical functions to manage monetary transactions.
Cryptocurrencies uses blockchain technology to acquire transparency, decentralization, and changelessness.
Cryptocurrency is decentralized digital currency. It’s based on blockchain technology.
You may be familiar with the most popular cryptocurrencies such as- Bitcoin, Ethereum and Doge coin. However, there are more than 6000 different cryptocurrencies in Crypto universe.
- The most popular and important feature of a cryptocurrency is – It is not controlled or managed by any central authority.
- The decentralized nature of the blockchain makes cryptocurrencies theoretically immune to the control and interference of government.
- The transaction of cryptocurrencies can be done directly between two parties via the use of private and public keys.
- These transactions can be done with minimal processing fees, allowing users to avoid the high fees charged by financial institutions.
You can utilize crypto to purchase customary products and services. Although, numerous individuals invest into cryptocurrencies as they would in different assets, similar to stocks or valuable metals.
While cryptographic money is a novel and exciting asset class, buying it can be dangerous as you should take on a considerable amount of exploration to completely see how each thing functions.
What is Blockchain? – Everything About Cryptocurrency
Blockchain seems complex, and it unquestionably can be, however its center idea is actually very basic. A blockchain is a sort of database.
Lets first understand what a database is?
A database is an assortment of information that is stored electronically in a computer system. Data, or information, in databases is ordinarily organized in table format t allow for easier searching and filtering for specific data.
Blockchain: It differs from a typical database in the way it stores information, blockchains store data in blocks that are then chained together.
Some Key Notes For Blockchain –
- One key difference between a typical database and a blockchain is the way the data is structured
- It stores data in the form of blocks which are chained together.
- A blockchain collects information together in the form of blocks, that grasp sets of information.
- Blocks have certain storage capacities and, when they’re filled, they’re are chained onto the previously filled block, which form a chain of data known as the “blockchain.”
- All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.
- Different types of information can be stored on a blockchain but the most common use so far has been as a ledger for transactions.
- In Bitcoin’s case, blockchain is used in a decentralized way so that no single person or group has control—rather, all users collectively retain control.
- Decentralized blockchains are changeless, which means that the data entered is irreversible. For Bitcoin, this means that transactions are permanently recorded and viewable to anyone.
Popular Cryptocurrencies in 2021 –
Here are some of the popular cryptocurrencies in which you can invest –
- Doge Coin
- Ripple XRP
Bitcoin(BTC) VS Ethereum(ETH)
While both the Bitcoin and Ethereum networks are powered by the principle of distributed ledgers(BLOCKCHAIN) and cryptography, these two cryptocurrencies differ technically in many ways.
For example, transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions are generally only for keeping notes.
Other differences include block time (an ether transaction is confirmed in seconds while it takes minutes for bitcoin) and the algorithms that they run – Ethereum uses ethash while Bitcoin uses SHA-256.
More importantly, the Bitcoin and Ethereum networks are different with respect to their overall motives. While bitcoin was created as an alternative to national currencies and thus aspires to be a medium of exchange and a store of value, Ethereum was intended as a platform to facilitate immutable, programmatic contracts, and applications via its own currency.
BTC and ETH are both digital currencies, but the primary purpose of ether is not to establish itself as an alternative monetary system, but rather to facilitate and monetize the operation of the Ethereum smart contract and decentralized application (dapp) platform.
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