EP.0 — What is CryptoCurrency?
Let’s trade cryptocurrency series
For the first episode, let’s start with Cryptocurrency 101 …
What is cryptocurrency?
Cryptocurrency is a kind of a digital currency or digital money, that being used as a medium for exchange like a banknotes and coins, the background process of cryptocurrency made from the principle of cryptography and integrated with Blockchain technology.
How does cryptocurrency work?
Cryptocurrency uses the decentralized technology to provide a highly secure payment method, you can store money or start paying without the requirement to use your name or open a ledger account with bank, called distributed public ledger.
Why cryptocurrency has value?
The first cryptocurrency, Bitcoin (BTC), which invented in 2008 by Satoshi Nakamoto and go live in 2010, at that moment 1 BTC is just 0.003$ but nowadays 1 BTC is over 4500$, (4500% in 7 years). OMG!!!
Answer is so simple, the value of cryptocurrency is like a money, gold, diamond, it is valuable if people believe and trust it to be valuable.
That’s it? …. NO!
Properties of cryptocurrency is important too. Firstly, most of cryptocurrency be available in limited quantities, refer the Law of Supply and Demand. Secondly, functional or utility, more useful yield a higher demand. Lastly is easily transferable, if it not common and widely used, it will not be used.
How to earn money from cryptocurrency
I would say it has many various ways to earn money from cryptocurrency, but I will separated into 4 main categories to make it easy to understand.
Cryptocurrency is created based on the blockchain technology and cryptography, the completed payment transaction will occur when a transaction is already verified and put it into the proper block. So, who has taken this responsibility? the answer is “miner” and miner will rewarded when discover a new block.
P.S. maybe I could write about it more.
Cryptocurrency Trading is the Forex (Foreign Exchange) of cryptocurrencies, this means we take an advantage of opportunities in markets by trading one currency to other currency.
In general, cryptocurrencies are divided into 2 types; bitcoin and altcoin (alternate coin).
P.S. I will go detail in next EP.
Initial coin offering (ICO) is a crowdfunding via cryptocurrency, it’s mean startup or entrepreneur initiates and sells the “cryptocurrency token” for Venture Capital (VC). Investors who invest in tokens means they have a symbol of ownership for that project which can valuable if the project is successful. In contrast to IPO, investors gain shares in the ownership of the company.
Others mean everything that is not Mining, Trading, and ICO. LOL
For example, bitcoin faucets, mobile games, read books, watching short videos, play dice, and etc.