Welcome to Cryptocurrency I, an article series designed to provide you with an essential understanding of cryptocurrency, its history, and how it works. Once an emerging technology, 88% of Americans have heard about cryptocurrency, and more than 17% of U.S. adults have “invested in, traded, or used crypto”, according to a 2023 research survey conducted by Pew Research Center.
Whether you’re completely new to cryptocurrencies, considering whether crypto is right for you, or a skeptic who wants to learn more, Cryptocurrency I equips you with the foundational knowledge needed to take your journey as far as possible.
From the basics of cryptocurrency to exploring different types of digital currencies, the reading materials and articles in Cryptocurrency I will deepen your understanding of cryptocurrency and blockchain technology. By the end of the course, you will emerge with the knowledge to navigate the world of cryptocurrency with confidence.
What you’ll learn
- What is cryptocurrency
- What is blockchain technology
- Different types of cryptocurrencies
- What is Bitcoin
- What is Ethereum
- What are altcoins
- What are stablecoins
- What are memecoins
Cryptocurrency
Cryptocurrency is a form of digital money that typically uses ledger-based technology such as blockchain technology to help facilitate secure and decentralized transactions. It typically operates independently of a central authority, such as a government or financial institution.
These notable characteristics made cryptocurrency a viable form of digital money, as people who held crypto could store or transfer value online without relying on a central authority.
While the concept of cryptocurrency had been around for decades, Bitcoin is widely considered the first successful cryptocurrency. Released in 2009 as open-source software, Bitcoin’s pioneering features made cryptocurrency viable at scale for the first time.
Since then, there have been thousands of other cryptocurrencies created, each with its own unique features and characteristics. According to conservative lower-bound estimates from Statista, as of November 2023, there are 575M identity-verified users of crypto-assets, making cryptocurrency a fast-growing digital alternative to traditional forms of money.
Blockchain technology
Cryptocurrencies utilize ledger-based technologies such as blockchain technology, a decentralized ledger that records all transactions across a network of computing devices, effectively ensuring that no single entity controls or has exclusive authority over this network.
Each new transaction is verified by network participants before being added to a "block" of transactions. These blocks are then linked together, creating a chain of blocks, hence the term "blockchain."
The decentralized nature of blockchain technology offers several advantages over traditional centralized systems. It eliminates the need for intermediaries, reducing costs and increasing transparency. Transactions are recorded immutably on the blockchain, making them tamper-proof and verifiable by anyone with access to the network.
While cryptocurrencies like Bitcoin and Ethereum utilize blockchain technology, the technology is also used for other applications in healthcare, supply chain management, real estate, voting, and other fields.
Different types of cryptocurrencies
There are many different types of cryptocurrencies, each with its own unique features and applications. While major cryptocurrencies like Bitcoin and Ethereum make up more than half of the total crypto market share, it’s important to understand popular types of cryptocurrencies, in order to determine whether any are right for you.
Bitcoin (BTC)
As the world’s first, most valuable, and most widely known cryptocurrency, Bitcoin introduced the concept of blockchain technology and helped define cryptocurrency as we know it today.
Introduced in 2008 by an anonymous individual or group known as Satoshi Nakamoto in a whitepaper titled "Bitcoin: A Peer-to-Peer Electronic Cash System," Bitcoin successfully brought the idea of digital money to life. Unlike traditional money, Bitcoin operates on a decentralized peer-to-peer network, allowing people to digitally transfer and store value without relying on intermediaries like banks, payment networks, or governments.
Ethereum (ETH)
Ethereum is perhaps best described as a distributed computing platform that supports smart contracts, decentralized applications (dApps), and non-fungible tokens (NFTs). Ether (ETH), the second largest cryptocurrency by market capitalization, is used to pay transaction fees, also known as gas fees, on the Ethereum network.
Notably, the Ethereum blockchain was the first to support smart contracts, which are self-executing contracts with terms written directly into code. Once deployed on Ethereum, smart contracts become immutable and transparent, ensuring the secure and efficient execution of transactions without the need for intermediaries.
Ethereum is the largest platform for dApps, NFTs, and other blockchain-based projects, and its smart contract capabilities have served as a model for subsequent blockchains, each with their own native cryptocurrency.
Altcoins
Altcoins are commonly used to describe all cryptocurrencies other than Bitcoin. Some of the most popular altcoins include Ethereum (ETH), BNB, Solana (SOL), XRP, and Cardano (ADA) — but in total, there are thousands of altcoins, each with their own set of features and applications.
Stablecoins
Stablecoins are a unique category of cryptocurrencies designed to maintain a stable value against a fiat currency, such as the U.S. dollar, or commodities, such as gold. Some of the most popular stablecoins include Tether (USDT) and USD Coin (USDC), which both maintain a peg with the U.S. dollar.
Meme coins
Like the name suggests, meme coins are cryptocurrencies inspired by online memes or pop culture references. According to CoinMarketCap, there are thousands of meme coins in existence, with the vast majority of cryptocurrencies trading for under approximately $1 — and in many cases, fractions of a penny. Popular meme coins include Dogecoin (DOGE) and Shiba Inu (SHIB).
How to explore cryptocurrency
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