We explain what it is and how different types of digital money differ from each other.
Blockchain technology is a structure that stores transactional records. It is used in the banking industry, in the field of cybersecurity and identity cards, as well as for the transfer of cryptocurrencies.
Blockchain for cryptocurrency is a distributed database that contains information about all transactions conducted by the participants of the system. The information is stored in the form of a chain of blocks, where each subsequent block is connected to the previous one.
Cryptocurrency is an internal unit of account of a public blockchain. A decentralized system is used to record transactions and issue new units. Decentralization lies in the fact that there is no internal or external administrator in the system, so banks, tax, judicial and government authorities cannot influence transactions of users of crypto assets.
The price for the exchange of cryptocurrencies is determined by the cost, or the price of the resource that was spent on obtaining the currency, as well as the demand for this cryptocurrency. Its convenience is that all transactions with cryptocurrency occur p2p, that is, without the participation of third parties.
Bitcoin (BTC) is the first and most famous monetary unit in crypto. It was created on October 31, 2008, by a user or a group of people under the pseudonym Satoshi Nakamoto, and to this day its founder is considered unknown.
Bitcoins appear with the help from miners. Mining is the process of generating cryptocurrency using modern technology. Miners receive a reward for mining bitcoins.
The bitcoin code makes it possible to create no more than 21,000,000 BTC, while about 19,000,000 BTC has already been mined. The complexity of mining and the acceptance that someday bitcoins will end provoked the emergence of new Altcoin coins.
Altcoin is an alternative to bitcoin, created by writing a new cryptocurrency code or using a fork (read below). All cryptocurrencies that are not bitcoin are altcoins. The most famous are Ethereum and Litecoin, which are still in the TOP 10 cryptocurrencies in the world.
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MTP Tokens
The MTP token is also an altcoin. MTP is an investment asset, its storage in a cryptocurrency portfolio will bring monthly passive income to token holders: each owner of the MTP token receives dividends in the form of 32% of the net profit of the marketplace, divided into all token holders in equal shares.
Benefits of buying an MTP token
- Increased referral fee. You get money from attracting new participants to the project.
- Receiving up to 32% of the fund’s net revenue
- The ability to create a P2P exchanger on the marketplace and receive additional profit.
- The ability to put up for sale their previously acquired shares in project pools.
In this material, we do not give investment recommendations, but simply give instructions on how to work with digital money.
Fork is a change in the rules of the network, according to which a block in the blockchain is recognized as authentic. At the same time, the blocks that are authentic in the new version are absolutely not supported by the old one. Since it is impossible to edit previously entered information in the blockchain, a fork is often the only way to change the rules of the blockchain.
Fork is divided into two types:
A soft fork is a mild form of game rule changes in which nodes of the old version of the blockchain can fully interact with nodes of the new version. The reasons for a fork can be different, from making minor changes to the work of the project in order to improve the work, ending with a complete change of the code in order to save the project.
At the same time, users are not given serious conditions: to stay on the old version of the protocol or switch to the new one.
A hard fork is a radical upgrade of the cryptocurrency, which as a result creates a new branch of the network in the blockchain system. Here, the protocols already work according to their own rules and do not interact with the old ones in any way. In this case, users face a choice: to support the upgrade or not.
The most popular hard fork in the field of cryptocurrencies was the hard fork of Ether in 2016, in which this cryptocurrency was divided into two camps: Ethereum and Ethereum Classic.
Exchange rate volatility — this is a decrease or increase in the rate of bitcoin or altcoin, for a certain period of time. Since digital coins show sharp and significant changes in the direction of trends, they are recognized as high-risk investments.
To get rid of volatility, a stablecoin was invented.
Stable Coin (USDT/BUSD/DAI, etc.) is a common name for cryptocurrencies that are tied to stocks of conventional currencies or physical goods. Their exchange rates are subject to less fluctuations than the rates of typical cryptocurrencies. Simply put, buying 1 USDT for $ 1, after some time it can also be sold for $ 1.
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