Bitcoin: The Story of a New Digital Currency

Impact-Site-Verification: 32d24759-20e1-494e-8b6a-ecfa925e20ba

Do you want to learn about cryptocurrencies?

Are you interested in a career in that field?

Then this guide is definitely something you must read!

In this article, we’ll treating the following:

  • Brief history of crypto currency
  • What is cryptocurrency and how does it work?
  • Advantages it brought along
  • Disadvantages
  • Conclusion

But before we proceed, I’d like to define some crypto terms:

1 Blockchain

What is Blockchain?

Blockchain is a digital ledger of all cryptocurrency transactions. Each block contains a timestamp, a transaction list, a hash of the previous block, and a link to the next block.

Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

In simple words, the jargon above means that Blockchain is a technology that records past transactions in blocks that are connected to each other.

This is to make sure that there is no cheating and that there’s accountability.

How does Blockchain work?

As we’ve said earlier, Blockchain is a ledger recording all the transactions being carried out on a crypto coin (for example Bitcoin).

Every Bitcoin user has a copy of the blockchain, which is constantly growing as each new block is added. Whenever a user wants to make a transaction, they compare the latest block on their copy of the blockchain with the transaction they want to send.

2 NFTs

What are NFTs?

NFTs are a new cryptocurrency standard that allows for the storage and transfer of digital assets on the blockchain.

NFT stands for Non-Fungible-Token, they’re different in that they cannot be substituted for something of similar value.

For example, 1 USD = 1.03 Euro (as of 2022), this means that anywhere 1 US dollar could be substituted for 1.03 Euros (this is fungible).

NFT’s are different, 1NFT does not equal another NFT.

So that’s what makes them more unique, an NFT could be worth $50 today and worth $300 dollars tomorrow. So their price can escalate anytime.

They are mostly represented in works of art, for example crypto kitties, you’ll find a lot of pictures of kittens that are used as NFT.

They are all unique and one of a kind.

Why are NFTs important?

NFTs could be used to store digital assets such as cryptocurrencies, tokens, or other digital assets. NFTs could also be used to store data such as files or messages.

They could also make you money very fast.

  • One major disadvantage of NFT is uncertainty. This is because their worth is derived from the assumption people have that it will provide value in the future.
  • Physical art cannot be digitized for NFT’s.
  • Another disadvantage of NFTS is that if the platform you buy your NFT from goes out of business, you may lose your NFT.

3 Crypto Exchange

Nowadays, cryptocurrency exchanges are a popular way to trade cryptocurrencies. They allow you to buy and sell various cryptocurrencies, as well as store them in a wallet.

Since there are many different crypto exchanges available,  it is important to find one that fits your needs. You can find a list of the most popular cryptocurrency exchanges here.

 

Once you have found an exchange that you feel comfortable with, you can begin trading. You can either use a wallet such as Coinbase or Gemini, or you can use Binance (the world largest crypto exchange).

4 Stop loss/stop limit

There are many ways to use stop loss limit in trading. Some people use them to protect their profits while others use them to prevent losses.

There are a few things to keep in mind when using stop loss limits, these things include:

 

  • Stop loss limits should be set as low as possible to protect your profits.
  • Stop loss limits should be set at a time when you are most likely to lose money.
  • Stop loss limits should be increased as you become more comfortable with the trade.

 

History of Cryptocurrency

Cryptocurrencies are not a new invention. They have been around since 2009 and have been used in a variety of ways.

They are decentralized, meaning they are not regulated or controlled by a single institution.

The idea of cryptocurrency began in the 1980’s but it was not well known not until Bitcoin, the first cryptocurrency was created in 2009 by Satoshi Nakamoto (Anonymous founder till today).

After the creation of Bitcoin, several other digital coins also sprung up expanding the crypto market.

The market experienced some major rise and falls causing some loss and gains along the way.

Not until 2017 did the crypto market grow tremendously, that was the time when many crypto exchange platforms also sprung up (Though some existed before that time).

Cryptocurrencies are not backed by any physical commodity like gold or silver. Instead, they are based on cryptography, which is the science of secure communication. Cryptography is used to create a secure system in which transactions can be verified and recorded.

 

Cryptocurrencies are created through a process known as mining. Miners are responsible for verifying and recording transactions on the blockchain, they are rewarded with cryptocurrencies for their work.

 

Cryptocurrencies are not immune to volatility. And though they’re different from fiat currencies (e.g $), they can still be affected by a number of factors, including political instability, financial crises, and changes in the market for cryptocurrencies.

However, despite these fluctuations, cryptocurrencies continue to be popular with investors and consumers.

What is cryptocurrency?

A cryptocurrency is a digital or virtual asset designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.

Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.

How do cryptocurrencies work?

Cryptocurrencies use decentralized technology to allow users to make secure payments and store money without the need for a bank or other financial institution. They use blockchain technology to record transactions on a public ledger in a secure, tamper-proof way.

Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.

What are the characteristics of a good cryptocurrency?

A good cryptocurrency should have a low transaction cost, a high degree of security, and a fast transaction speed

What is the difference between digital currencies and fiat currency?

Cryptocurrencies and fiat currencies are two different types of money that are used in different ways. Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Fiat currencies, on the other hand, are physically represented units of currency that are subject to government and financial institution control. Fiat currencies are often backed by a commodity, such as gold or silver, and can be used to purchase goods and services.

Advantages

Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.

Some researchers have identified several potential advantages of cryptocurrencies over traditional fiat currencies, including:

 

  • Decentralized: Cryptocurrencies are not subject to government or financial institution control, which could make them more resilient to economic crises.

 

  • Faster and Lower Costs: Transactions with cryptocurrencies are faster and cheaper than with traditional currencies.

 

  • Protected: Cryptocurrencies are protected by cryptography, which makes them difficult to counterfeit.

 

  • Anonymous: Participants in a cryptocurrency system are not necessarily known to each other. This could make cryptocurrency systems more secure.

Disadvantages

Cryptocurrency has many disadvantages that you may not have considered. Here are some of the most common cryptocurrency disadvantages:

  • Cryptocurrencies are not backed by any physical currency.

 

  • Cryptocurrency can be used to purchase goods and services with fake documents.

 

  • Volatility: Cryptocurrencies are extremely volatile, meaning their prices can fluctuate wildly from one day to the next. This makes them unpredictable and risky investments.

 

  • Lack of regulation: Cryptocurrencies are not regulated by governments or financial institutions. This lack of regulation makes them susceptible to fraud and manipulation.

 

  • Bitcoin dominance: Bitcoin, the first and most well-known cryptocurrency, dominates the market. As of April 2021, Bitcoin accounted for nearly 60% of the total cryptocurrency market. This dominance gives Bitcoin significant influence over the market.

 

  • Security risks: Cryptocurrencies are stored in digital wallets and are vulnerable .

Conclusion

i t turns out that everything still boils down to your opinion/ view about it.

While some people believe that it is going to be an absolute game-changer, others believe it is going to spoil the economy and make people’s lives more miserable.

The decision is yours!!!

DISCLAIMER: No information on this site should be perceived as investment advice.

No matter what, you should only invest what you can afford to lose.

Leave a Comment