The term cryptocurrency is not new to anyone at this point, we all know someone who is investing or at least thinking about it. But many people still find it difficult to understand how this all works. And because we want people from any background to benefit from the marvels of decentralized finance (or DeFi) we decided to create this guide to help even absolute beginners navigate the crypto world. In the first part of this series, we will walk you through the basics and must-know concepts to begin your journey, starting with a very important one.
What is cryptocurrency?
Simply put, Cryptocurrency is a digital asset that uses cryptography to ensure the protection of user information and to guarantee the safety of every transaction. Unlike traditional currency, crypto value is not tied to anything in the real world, nor is it controlled by a central authority, which means that the authoritative power is distributed among all the peers on a network. That leads to what we call peer-to-peer transactions, giving people more freedom, and saving them from the costly fees they would encounter in traditional transactions. If your curiosity brought you our way, it’s likely that you’ve encountered something that confuses people when entering this world: cryptocurrency can present in two ways, as a COIN or as a TOKEN. So, what is the difference between them?
Token x Coin
The difference lies in how blockchain technology is used. Coins operate in their own blockchain, which means it keeps track of all transactions that involve it, like Bitcoin and Etherium. It also serves as traditional money, as you can even go to some major corporations and buy products using Bitcoin, for example. Now, unlike coins, tokens operate on other crypto’s blockchains and their transactions rely on smart contracts which are unique to each blockchain.Knowing the difference between these two is very important before continuing to the next step: investing.
Now that you know the basics, we can go right into the fun bits, so keep an eye out for the next part of our series where we will talk about how trading works and all you need to know to start. Also, make sure to follow us on our social media, so you don’t miss out on the updates on the project.
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