What is cryptocurrency? What is the difference between cryptocurrency and traditional currencies? How to buy crypto? What is the most popular one?
"A type of digital currency that is encrypted using complex code systems and cryptographic protocols."
What is Cryptocurrency?
Cryptocurrency is a type of digital currency that is encrypted using highly complex code systems using cryptographic protocols.
Cryptocurrency studies, dating back to the 1980s, were first explored by leading cryptographers of the period. Computer scientist David Chaum carried out the first research and development in this field with his “ecash” and “Digicash” projects. The concept of “decentralized cryptocurrency” was first announced with bitcoin in 2008, after several other projects that were studied in the 1990s.
On 31 October 2008, white paper with all technical details about bitcoin was published with the signature of Satoshi Nakamoto. Many celebrities have claimed to be Nakamoto since that date and it has even been said that this person may be an artificial intelligence. Others have argued that such a system cannot be designed by a single person and that Satoshi Nakamoto is a developer group. Today, who Satoshi is still a mystery.
What is the Difference Between Cryptocurrency and Traditional Currencies?
There are many features that make cryptocurrencies different from traditional banking and payment systems. Decentralization comes first. Cryptocurrencies are not managed by any person, country, leader or organization. Its control is not provided by any authority or central power. Cryptocurrencies cannot be intervened outside the software. It is almost impossible to perform speculative or manipulative actions on the network.
In the traditional financial system, individuals need a third party to which they will trust to be able to transfer money to each other. While this third party provides the transfer of money quickly with its technology, it provides an environment of trust and prevents possible problems. No intermediary is needed when transferring cryptocurrencies. Money is transferred directly between digital wallets. This process is possible with blockchain technology.
How to Buy Cryptocurrency?
The most common method of buying cryptocurrencies is using crypto exchanges. By registering on one of the trusted crypto exchanges, you can have what you want from thousands of cryptocurrencies today. You can buy cryptocurrencies by depositing fiat money, as well as trading between cryptocurrencies.
Besides exchanges, you can ask a friend who has a cryptocurrency to transfer to your own wallet. Since cryptocurrencies are transferred directly between wallets, it is possible to own coins in a short time.
It is also possible to have a cryptocurrency by mining. Powerful computer hardware is required for this process. Hardware solves complex mathematical operations and is rewarded with some cryptocurrency in return.
What are the Most Popular Cryptocurrencies?
Bitcoin, the world’s first decentralized cryptocurrency, is by far the most used cryptocurrency since its birth. BTC, which was first announced against the dollar on the New Liberty Standard exchange on October 5, 2009, managed to reach a market value of hundreds of billions of dollars in its short life.
Ethereum, which is known as the “2.0” version of the crypto industry and provides innovation by opening the industry to all developers in the world, has not lost its second position for many years. Equipped with leading protocols such as smart contracts and decentralized applications, the ETH network has played a crucial role in providing the infrastructure necessary for the industry’s continuous development.
Stablecoins, which are newer than conventional cryptocurrencies such as Bitcoin and ethereum, have resolved many issues encountered when trading in the cryptocurrency markets. Stablecoins are cryptocurrencies whose value is fixed to an asset, fiat currency or another cryptocurrency. For example, Tether and TrueUSD are cryptocurrencies fixed in dollars, with billions of dollars in market volumes.
Investors may want to buy a fixed asset rather than selling their cryptocurrencies and getting another coin or fiat. Stablecoins solves this problem.
How is Cryptocurrencies Produced?
Usually, cryptocurrency production is possible thanks to a process called mining. The most basic meaning of mining is solving a complex set of math problems by running powerful hardware and related software, and taking cryptocurrencies as a reward.
Miners are the backbone of the cryptocurrency industry. Because the process they do is not related to the industry, but directly to the underlying blockchain technology. The problems that miners solve with their powerful hardware are actually the process of validation of all transactions on the network.