The hype surrounding cryptocurrencies like Bitoin has died down slightly, but it is still an extremely talked-about topic. It may be talked about, but there are so many people that just nod along, smile, and pretend to know what the heck is going on in the conversation.
This is because crypto, block chain, and everything relating to it is confusing, at least on the surface. But when you dig down a little bit deeper, you’ll discover fairly quickly that it’s not all that difficult – and it certainly isn’t rocket science. A respected source in block chain PR has provided you with this basic guide to crypto to help you clear up any and all confusions.
There’s a Difference Between Crypto and Blockchain
It’s a common misconception for the average person to assume that the words cryptocurrency and blockchain mean the same thing. However, they are actually two entirely different things. Cryptocurrency is the actually currency, like Bitcoin or Dash. Blockchain, on the other hand, is the technology involved that allows a cryptocurrency to function.
To put things more simply, cryptocurrency is essential just digital money. These days, you can actually use these digital currencies to pay for things as long as the retailer accepts crypto (typically they only accept Bitcoin) as a payment method. The value of each cryptocurrency fluctuates, just as the stock market does and just as real currencies do. Generally speaking, the more people investing in a specific cryptocurrency, the more it is worth.
Now let’s cover the true meaning of blockchain. Blockchain is the technology that actually makes it possible for cryptocurrency to exist in the first place. It works by using encryption codes to create, monitor, and regulate digital currencies. The name “blockchain” comes from the fact that these blocks of records are chained together using advanced cryptography.
There’s a Difference Between Tokens and Coins
The terms “token” and “coin” are commonly used in crypto conversations, and they are often used in an incorrect way. Coins and tokens are all considered cryptocurrencies, but there are minor differences between the two. Coins are the equivalent of money, just in its digital form. Coins function just as those dollar bills in your wallet function, and the most famous of all coins is Bitcoin.
There is a limited supply of coins in the world that are constantly being bought up, sold, and traded with other coins. Some experts believe that these digital coins will eventually replace traditional currencies. Tokens, however, are “digital assets, issued by a project, that are often used as a method of payment insider a project’s specific ecosystem.” A token performs the same function of any other digital asset.
There is much more that could be covered on the basics of crypto, but those things are not necessarily important to the average person. But if you would like to deem yourself an expert of cryptocurrency and blockchain, by all means continue doing your research and start investing in this lucrative industry.
