Your Guide to Cryptocurrency and Blockchain

1. What is Cryptocurrency?

Cryptocurrency is a secure digital virtual coin that can be owned and used as an online asset by individuals, private groups or even the global community to trade for services or goods. It uses encryption technology and blockchain as ledger to secure, validate transactions, and regulate new creation of units. This virtual currency is reported to be very difficult or near impossible to be reproduced as counterfeits.

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2. What is Blockchain?

Blockchain is a digitized, decentralized, public ledger of all digital transactions, which are linked and secured using cryptography. Think of blockchain as a chain of blocks storing data like a database, newest transactions are allowed to be recorded and added on it only in chronological order with the consensus of the network. It allows market participants to keep track of digital transactions securely without central record keeping and interference. [ Read Complete Guide ]

3. How do Cryptocurrencies work with Blockchain?

Cryptocurrencies are assets that can be traded, but in order for participants to trade these assets, they need a blockchain which is a public ledger to eusure every transaction will be transparent and permanent to prevent frauds eg. double spending. This means transactions can be done securely on the blockchain without involving and paying a middle man or a centralized institution.

4. Types of Cryptocurrencies:

Centralized cryptocurrency is managed and controlled by a government or a company. These central authorities have the power to increase the value of the virtual currency or remove it. Centralized cryptocurrencies have value only in the specific area under company or government boundaries. It is to some extent similar to a shopper going to a digital portal, he is rewarded with points for every items he bought at the digital mart. Those points are technically centralized digital currencies.

Decentralized cryptocurrency is not issued by any central authority, it exists on a blockchain and network that ensure peer to peer transaction records are transparent and permanent, hence rendering it theoretically immune to government interference or manipulation. Bitcoin is an example.

5. Advantages of Decentralized Cryptocurrency:

You own it solely - Decentralized blockchain system ensures no one else has control over your cryptocurrency except yourself. Remember the 1929 Great Depression? 744 banks collapsed and many civilians who kept their life savings at those banks lost their money.

Now since no bank, middleman or any centralized institution control a decentralized blockchain, your cryptocurrency is safe and will be in your wallet even if your government or nation collapsed.

Free from money printing manipulation of value - Wikipedia reported that Venezuela entered a period of hyperinflation with inflation reaching 4000% in 2017 and 1.35 million percent by end of 2018. In early 2019, the money earned from a minimum monthly salary is less than the price of a Macdonalds Happy Meal. The main reason is because its central bank printed a lot of money to fund public spending deficits. This will not happen to a decentralized cryptocurrency.

Image: Hyperinflation caused exchange rate to reach 250,000 bolivars for 1 USD.

Payment is fast and secure - Payment with cryptocurrency is fast and more secure on an immutable blockchain. No change is required and users need not worry about credit card frauds.

Read More Advantages Below..

Is it safe to invest in Cryptocurrencies? Pros and cons of its technology explained.

Understand the main concerns of traders on blockchain investments, read the recommendations on how to manage those concerns.

Study the best practices of Cryptocurrency and Blockchain investments.

Learn how can you as an investor know if a Crypto Project is led by an Effective Team.

Check out the options available for investors to trade Cryptocurrencies.

Read recommendations of selecting and trading on a cryptocurrency exchange.

Learn the required steps to trade on an exchange with instructions and screenshots provided.

Read the Guide to Smart Contract and learn about its design and objective.

Understand how Decentralized Applications (DApps) function.

Blockchain Consensus Protocols Guide

Learn about PoW mining and how miners create PoW coins like Bitcoin and Ethereum to make a living.

PoS is used by prominent coins suchs as Dash and NEO. Learn about its design.

DPoS is used by prominent cryptocurrencies such as EOS and STEEM. Learn about its design.

NEO cryptocurrency and blockchain uses dBFT protocol. Learn about its design.