Fundamentals
Crypto Fundamentals are mostly very technical to understand. On this page, I try to simplify as most as possible. I link to other useful websites or videos.
Why care about fundamentals?
If you want to buy crypto currencies or tokens for investment, or to have a NFT (non fungible token), or to play a blockchain based game, or something else related with crypto or blockchain.
It helps if you understand the fundamentals of a crypto.
It helps to understand why some crypto bring a value and a lot NOT
It helps to create the right crypto portfolio
It helps to minimize risk of loosing money
It helps to make descision more facts based
What is a Blockchain?
A blockchain is a distributed “database” that is shared among computer in a network. Blockchain store data in blocks that are then linked together via cryptography and are permanently recorded and viewable to anyone.
share valuable data in a secure, tamperproof and decentralized way
What is Bitcoin?
Bitcoin is a decentralized digital currency, often called as “digital gold” created in 2009.
Bitcoin (abbreviation BTC) is known as a type of cryptocurrency. The “crypto” means > it uses cryptography to secure it.
Unlike creating government currencies, it is operated by decenteralized authorities (computing power).
All Bitcoin transactions are verified by a massive amount of computing power, known as “mining”.
It is deflationary designed by math.
Known as "digital gold"
Bitcoin (BTC) is the "flagship" of all crypto currency
Deflationay (21 mio can be mined)
What are Altcoins?
Altcoins are cryptocurrencies other than Bitcoin. Providing new or additional capabilities, such as smart contracts. Some of the main types of altcoins include mining-based / staking-based cryptocurrencies, stablecoins, security tokens, and utility tokens. Thousands of Altcoins exists.
Altcoins are cryptocurrencies other than Bitcoin.
Proof of Work (PoW) versus Proof of Stake (PoS)
Both of these models are called “consensus mechanism”. They are required to confirm transactions that take place on a blockchain. This without the need of a third party.
Proof of Work (PoW) & Proof of Stake (PoS) are the most common consensus mechanisms. They are used by major cryptocurrencies to secure their network.
What is Crypto Staking?
I love staking, as you can earn staking rewards with it, similar to get an interest on a saving account (do you remember, as you got this years ago, **smile**)
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain.
