CRYPTO: How it works and how it is explained for beginners.

28 Eyl

CRYPTO: How it works and how it is explained for beginners.

Here is a detailed explanation of the key concepts related to cryptocurrencies:

Cryptocurrency

Cryptocurrencies are decentralized digital currencies that use cryptography to secure transactions. Unlike traditional currencies, they are not issued by a central authority such as a bank.

The main characteristics of cryptocurrencies are:

-They exist only in electronic form
-Transactions are made directly between users (peer-to-peer)
-They use blockchain technology to record transactions
-Their value fluctuates according to supply and demand

Blockchain

Blockchain is the underlying technology that allows cryptocurrencies to work.

Its main features are:

-It is a distributed and decentralized ledger that records all transactions
-Each transaction forms a "block" that is added to the existing chain
-The data is encrypted and impossible to modify once recorded
-It works without a central authority thanks to a network of computers

The halving

The halving is a scheduled event that concerns certain cryptocurrencies such as Bitcoin.

Its main characteristics are:

- It halves the reward given to miners for creating new blocks
- It usually occurs approximately every 4 years (every 210,000 blocks for Bitcoin)
- Its purpose is to control inflation by gradually reducing the issuance of new units
- It can have an impact on the price of the cryptocurrency by reducing the supply
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The different types of coins

There are several categories of cryptocurrencies:

Bitcoin: The first and best known cryptocurrency
Altcoins: All cryptocurrencies other than Bitcoin (e.g. Ethereum, Litecoin)
Tokens: Tokens created on existing blockchains, often linked to specific projects
Stablecoins: Cryptocurrencies whose value is indexed to a fiat currency or a stable asset
Memecoins: a cryptocurrency that comes from an Internet meme or that has a humorous, ironic characteristic, a joke as its origin.

Each type of coin has its own characteristics and uses, but all rely on blockchain technology to operate in a decentralized manner. 10 minutes ago
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Here is a list of the top altcoins, memecoins, and stablecoins to know in 2024:

Major Altcoins:

-Ethereum (ETH)
-Cardano (ADA)
-Solana (SOL)
-Polkadot (DOT)
-Ripple (XRP)
-Litecoin (LTC)
-Chainlink (LINK)
-Polygon (MATIC)
-Avalanche (AVAX)
-Tron (TRX)

Popular Memecoins:

-Dogecoin (DOGE)
-Shiba Inu (SHIB)
-Pepe (PEPE)
-Bonk (BONK)
-Book of Meme (BOME)

Top Stablecoins:

-Tether (USDT)
-USD Coin (USDC)
-Frax (FRAX)
-Dai (DAI)
-TrueUSD (TUSD)
-First Digital USD (FDUSD)
-Decentralized USD (USDD)

Altcoins are alternative cryptocurrencies to Bitcoin, often offering specific features or use cases.

Memecoins are cryptocurrencies that were initially created as jokes but have sometimes gained popularity.

Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged to a fiat currency like the US dollar.

Each category has its own characteristics:
-Major altcoins often aim to solve specific problems or provide platforms for the development of decentralized applications.
-Memecoins are generally driven by their community and can experience high volatility.
-Stablecoins seek to offer the stability of traditional currencies while retaining the benefits of cryptocurrencies.

It is important to note that the cryptocurrency market is very dynamic and the popularity and value of these tokens can fluctuate rapidly

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Here is a simple explanation of blockchain in easy-to-understand words:

What is blockchain?
Blockchain is like a big digital notebook that everyone can see and use, but no one can change without the others' permission.

How does it work?
-Recording information
Every time someone does something important (like sending money), that action is written in the notebook.
-Creating blocks
These actions are grouped into "pages" called blocks.
-Chaining blocks
Each new page is linked to the previous one, forming a chain. That's why it's called a "blockchain."
-Verification by everyone
Before adding a new page, many people check that everything is correct.
-Impossible to cheat
Once a page is added, it's almost impossible to change it without everyone noticing.

Why is it useful?
-Security: It is very difficult for cheaters to change the information.
-Transparency: Everyone can see what is happening.
-No boss: There is no single person who controls everything.
-Reliability: Information can be trusted without the need for an intermediary.

Blockchain is used for cryptocurrencies like Bitcoin, but also for many other things like tracking where the products you buy come from or storing important contracts.

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