Cryptocurrencies are a reality today, and a significant chunk of investors are greenhorns making their first tentative steps into the crypto arena. However, the newbie wonder about the basic threshold of crypto knowledge one must possess before taking the plunge? Here are a few basics one must keep.
Three checks before entering the crypto arena
Bitcoin is the numero uno cryptocurrency, and it is something much akin to what Ford is for cars. Bitcoin is based on Blockchain technology and was a byproduct of the rampant money printing by central banks surging inflation leading to the erosion of the investors’ valuable savings. At present, over 15,000 cryptocurrencies are totaling over 2.2 trillion dollars. Bitcoin is the genesis of the phenomenon called Cryptocurrency.
Bitcoin is what Ford is to a car
Bitcoin is based upon Blockchain technology. Bitcoin is a DeFi or decentralized finance compared to Fiat Currencies that the Central Banks issue. Cryptocurrency can remove many ills associated with the current finance regimens. It is encrypted and therefore makes it difficult, if not impossible, to hack the system.
Bitcoin does away with the intricacies of present day financial regimen
What makes Blockchain technology-based Cryptocurrency is its decentralized public ledger of transactions. It makes money transfer and other financial transactions almost instantaneous and almost free. Instead of a central authority like the bank, which validates a transaction and establishes identity, Cryptocurrency relies on a network of validators. It is one of the chief reasons Central Banks feel threatened and fear the loss of their authority.
NFT
NFT is becoming one of the hottest commodities today. NFT stands for Non Fungible Tokens. Fungible tokens are the fiat currencies issued by central banks like dollar or pound sterling bills. Non Fungible Tokens are digital assets like artwork or music that are unique. In this case, NFT authenticates ownership via a “token.”
Consider NFR as a kind of digital asset whose proof of ownership cannot be duplicated. For example, artwork can be copied; owners want to know the original. It is certified by the NFTs. NFTs will have a profound impact on artists and the buyers of collectibles because of validation and tracking.
