Everything You Need to Know About Cryptocurrency
Cryptocurrency is taking the world by storm, one digital ledger at a time.
If you understand what that means, then you likely have an idea of how cryptocurrency works.
But if you don’t get the reference, that’s ok. This blog is everything you need to know about cryptocurrency.
Cryptocurrency is Blockchain
What that means is that each unit of cryptocurrency, called a coin, is written with blockchain code.
Blockchain code is typically a couple hundred lines of code that create a distributed database.
A distributed database is a piece of software with storage on multiple hard-drives. This can include being stored on different computers around the world, as is the case with cryptocurrency.
The distributed database is the vessel that allows users of the currency to pass it back and forth from user-to-user.
When this process occurs a ledger is created. That ledger tracks every user who has ever owned a fraction of a coin.
The ledger records wallet IDs. As the money is passed the ledger grows and so does the blockchain.
Cryptocurrency is backed by traditional currencies that are put into it upon purchase. It’s total value increases as demand rises, but is also wildly unstable.
Blockchain is Not Cryptocurrency
You aren’t reading that wrong. We just discussed how cryptocurrency IS blockchain.
While that is true, blockchain is not cryptocurrency. Blockchain is much more.
Since a single blockchain is its own ledger and database, it can be used to record the passing of just about anything from person-to-person.
It doesn’t have to represent money, it can represent contracts. Smart contracts are just one-way blockchain is being used today.
It can be used to record deeds and other assets, also.
Major Players in The Crypto-Market
Today there are a number of players in the cryptocurrency market. Dozens, at least. But there are three cryptocurrency platforms we believe are notable.
Bitcoin is the Q-Tip or Kleenex of cryptocurrency. What we mean is it’s a name so commonly associated with the product that people refer to all cryptocurrency by the brand name.
Have you ever heard someone say they are drinking a Coke while holding a Pepsi? Bitcoin has the marketing advantage because it’s the first brand that comes to mind when someone says cryptocurrency.
Bitcoin was early to the cryptocurrency seen, having been created in 2009. While Ethereum didn’t launch until 2015, it’s given Bitcoin a run for its money.
Ethereum offers a competing coin, Ether. Ether has a separate marketplace with a different value from its predecessor. The two are frequently competing.
With multiple currencies hitting the market, Coinbase is a platform for securely selling, trading and buying digital currency from different vendors. These include: Bitcoin, Ethereum and Litecoin.
However, there are Coinbase alternatives — click here.
Everything You Need to Know
That’s everything you need to know about cryptocurrency in a nutshell:
- It’s blockchain
- It’s wild; and
- the market is expanding
While the current state of cryptocurrency is volatile, no doubt businesses and individuals will find more ways to incorporate blockchain technology into the future of technology.
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