Today, in the world of cryptocurrency, there appears to be, a newfound language, which seems to make people confused.
Surprisingly, a good number of people, fall under this category, so, you may not, just be the only one left in the dark.
This article will, hopefully, provide answers, to many budding questions that will change your knowledge, of cryptocurrency.
A very common one here;
what is cryptocurrency?
Cryptocurrency comprises of web-based, digital assets that use cryptographic functions, to carry out financial transactions.
These digital assets, make use of blockchain technology, to obtain a level of transparency and decentralization.
Digital assets can include Bitcoin, Litecoin, stablecoins, and other cryptocurrencies.
Types of cryptocurrency?
Asides from Bitcoin, which appears to be most popular, others include Stellar and Tron.
They are, specifically, called altcoins.
Social media giant, Facebook, is expected to roll out its crypto coin, called Libra.
Facebook’s cryptocurrency, would be governed by certain partners, as well as, getting tied, to the fiat currencies, (US Dollar and Euro), of government bonds
What is an ICO?
Similar to an initial public offering, (IPO), of stocks, initial coin offering, (ICO), offer tokens.
What the public gets in exchange for money is token.
This indicates that, the contract agreement, between the issuer and the buyer, has been settled.
The buyer, will then, own the coins, or, tokens, as it may be.
Are cryptocurrencies, securities?
Securities are often negotiable financial devices, given out, by the government, or, a company, with rights of ownership, right to buy, or, sell.
Bitcoin has no centralized governance, thus, not defended, as a security.
Its success is not tied, to that of a centralised organisation.
Some digital assets, may be seen as securities, which can be subjected to SEC regulations.
Any difference between bitcoin and blockchain?
Bitcoin is, a decentralized digital asset. Bitcoin leverages blockchain technology.
It records all the cryptocurrency transactions that have been verified, by cryptography.
It is not only open and secure, but, also, accessible by all.
Anyone is open, to make a transaction and sign it, with a private key.
Bitcoin has proof of work, (POW) and it makes use, of specific models, for transactions.
Blockchain technology, however, has no restrictions, on its transaction model.
Would Libra end bitcoin?
Libra is, more of a stablecoin, though, Facebook is saying that, it is a cryptocoin.
The Libra would carry low volatility because, it is tied to the US dollar.
With the partnership Facebook has created with other companies on its cryptocoin.
Libra would have more visibility, compared to Bitcoin.
Bitcoin would, however, remain the choice, for cryptocurrency enthusiasts.
Not being tied to any government bond is, what makes it appealing to some people.
Cryptocurrency has established a new order, combining currency trading, international commerce and banking.
In the ever present word of business, ensuring the transfer of funds, with the highest form of security is, the most sought after execution and cryptocurrency is, the answer to it.
Featured Image: verdict.co.uk