Cryptocurency. also known as crypto, is a digital currency that functions as a medium of exchange via a computer network and is not reliant on any central authority, such as a government or bank, to support or maintain it. It is a decentralized system for verifying that the parties to a transaction bave the money they claim to have, removing the need for traditional intermediaries lie banks when funds are transferred between two entities.
Cryptocurrencies are digital or virtual currencies that rely on cryptographic systems to function
They make it possible to make secure online payments without the use of third -party intermediaries. The term “crypto” refers to the encryption algorithms and cryptographic techniques used to protect these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.
TYPES OF CRYPTOCURRENCIES
NON-FUNGIBLE TOKENS (NFTS)
Tokens that are not fungible are not cryptocurrencies. However, we have included them as a bonus type in this guide because it is critical to distinguish them from digital currencies. The primary distinction between the two is that NFTs use different token creation standards than currency tokens
Beginners must understand and differentiate between these assets as well. NFTs are one-of-a-kind digital certificates that prove an item’s ownership and provenance. NFTs, unlike currency tokens that resemble money, are not money and cannot function properly when used for value transfer.
This is due to the fact that each NFT is distinct: even those created by the same smart contract within the same series have distinct features stored within their metadata.
A common misconception is that cryptocurrencies allow for private transactions. Most digital currencies, including Bitcoin, Litecoin. Bitcoin Cash, and Etherswn. do not fall into this category. They do, however, provide pseudo-private or pseudonymous transactions in which some information is kept hidden and the rest is made public
For example, the Bitcoin network will typically share the sender’s and receiver’s addresses, the amount transacted, and the fee paid. Furthermore, the entire transaction history of a wallet is accessible via the internet.