Crypto News | Lessons
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👉 Speed: With cryptocurrencies, sending money – or value – across regions or continents happens in a few minutes. This trumps traditional cash, which takes hours to days in some cases.
👉Security: Cryptocurrencies run on blockchains, which are distributed and decentralized. Since they are not centralized, there’s no single point of failure. This makes the blockchain harder to corrupt or hack.
👉 Censorship-resistant: Anyone can use cryptocurrencies. They offer users financial freedom. No government or central authority can censor or reverse a transaction once it’s completed
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A blockchain is similar to a database but better. Databases store a large volume of data electronically on a computer or on servers made up of powerful computers. These servers are often centralized in a location and built for easy storage and retrieval of data.
The blockchain differs from a database in setup. Unlike a database, the blockchain is a decentralized public ledger. The computers powering the network are not all under one roof or operated by one single individual.
In addition, a blockchain collects multiple data together in groups, otherwise known as ‘blocks.’ These blocks have specific storage capacities. Once filled, the blocks are chained and added to the previously filled block to form a chain of data known as a “block-of-chain” or the “blockchain.”
In the case of Bitcoin, the blockchain stores every Bitcoin transaction initiated on the network.
#how_crypto_work_part1
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Bitcoin miners who successfully solve the problems are allowed to add blocks of verified transactions into the blockchain. These miners are paid a reward of 6.25 Bitcoins (about $262K) for their trouble.
#how_crypto_work_part2
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Technically, cryptocurrency wallets don’t store your crypto funds. They store your private keys. A private key is a password that proves ownership of your crypto holdings and is used to initiate transactions. Since your crypto lives on the blockchain, the private keys are required to provide access to the digital assets.
#how_crypto_work_part3
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Where does cryptocurrency come from? Take bitcoin, it consists of blocks, which are equations. A reward is given for solving each equation. But only a machine can solve this equation: a processor or a video card. People who buy cryptocurrency mining equipment are called miners. Other cryptocurrencies are mined according to a similar principle. Bitcoin (BTC) is the first and most famous cryptocurrency in the world.
The second most important digital cryptocurrency is Ether (ETH/Ethereum). There is a difference between bitcoin and ethereum. Bitcoin is a peer-to-peer payment system, while Ether is a digital currency and a platform that allows you to create and run smart contracts and decentralized applications (dApps). The Ethereum network also allows the creation of other cryptocurrencies using the Ethereum protocol (BTC and ETH operate on separate protocols and their processes are not connected to each other).
The second most important digital cryptocurrency is Ether (ETH/Ethereum). There is a difference between bitcoin and ethereum. Bitcoin is a peer-to-peer payment system, while Ether is a digital currency and a platform that allows you to create and run smart contracts and decentralized applications (dApps). The Ethereum network also allows the creation of other cryptocurrencies using the Ethereum protocol (BTC and ETH operate on separate protocols and their processes are not connected to each other).
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Random Bitcoin fact: Bitcoin is a deflationary asset.
It's total supply is capped at 21 million coins, making it deflationary as the supply cannot be inflated beyond the predetermined limit. This scarcity implies that over time, the value of Bitcoin is expected to increase due to limited supply and growing demand, making it a store of value similar to gold.
However, this nature also incentivizes users to hold on to their coins rather than spend them, potentially impacting economic activity.
Random Bitcoin fact: Bitcoin is a deflationary asset.
It's total supply is capped at 21 million coins, making it deflationary as the supply cannot be inflated beyond the predetermined limit. This scarcity implies that over time, the value of Bitcoin is expected to increase due to limited supply and growing demand, making it a store of value similar to gold.
However, this nature also incentivizes users to hold on to their coins rather than spend them, potentially impacting economic activity.
It's total supply is capped at 21 million coins, making it deflationary as the supply cannot be inflated beyond the predetermined limit. This scarcity implies that over time, the value of Bitcoin is expected to increase due to limited supply and growing demand, making it a store of value similar to gold.
However, this nature also incentivizes users to hold on to their coins rather than spend them, potentially impacting economic activity.
Random Bitcoin fact: Bitcoin is a deflationary asset.
It's total supply is capped at 21 million coins, making it deflationary as the supply cannot be inflated beyond the predetermined limit. This scarcity implies that over time, the value of Bitcoin is expected to increase due to limited supply and growing demand, making it a store of value similar to gold.
However, this nature also incentivizes users to hold on to their coins rather than spend them, potentially impacting economic activity.
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To buy and store cryptocurrencies, you need a wallet. A wallet is a program that generates pairs of private and public keys. Each of the keys has the form of a unique character set of letters and numbers. The public key is the address to which digital money is sent and can be seen by other users. With the help of a private key, an electronic digital signature is created in the blockchain. This is a way to confirm your right to make transactions.
The address in the blockchain belongs to the one who knows the private key from it. If the private key is lost, the wallet owner will lose access to their funds. It is important to protect the private key from outsiders, since, with the help of this key, they will be able to transfer all crypto assets from the corresponding address to themselves. Private and public keys work together: without the public key, the sender will not be able to start the transaction, without the private key, the recipient will not be able to decrypt the transfer.
The address in the blockchain belongs to the one who knows the private key from it. If the private key is lost, the wallet owner will lose access to their funds. It is important to protect the private key from outsiders, since, with the help of this key, they will be able to transfer all crypto assets from the corresponding address to themselves. Private and public keys work together: without the public key, the sender will not be able to start the transaction, without the private key, the recipient will not be able to decrypt the transfer.
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