Abstract
In this blog we will study about cryptocurrency. Let's begin with What cryptocurrency is, How it survives, Types of cryptocurrency that exist around us and Security, safety and privacy of cryptocurrency.
Introduction
Cryptocurrency can be defined as digital currency, electric-cash, electric-money, cyber-cash or electronic-currency. Cryptocurrencies are created by encrypting the algorithms. Cryptocurrencies are used as a medium of exchange, but not all the cryptocurrencies!! many other exist to support other altcoins. Altcoins can be defined as all cryptocurrencies other than bitcoin.
Every cryptocurrency holds more than just being a medium of exchange. Let's take an example of Vechain, which is a blockchain platform designed to enhance supply chain management and business processes. Cryptocurrency are highly volatile because they are not regulated by banks or any other third parties. These are very uninsured and hard to predict assets. Even experts cannot surely predict whether a cryptocurrency will exist after a month or won't, whether the coin will boom or just disappear the very next minute, hour or a day and moreover, cryptocurrencies are termed as an intangible assets.
Coins & Tokens
There are two sub-divisions of cryptocurrency that are coin and tokens, and both of them are very different from each other. Everyone might have heard the term blockchain, and we can differentiate the coins and tokens on basis of blockchain. Coins are the cryptocurrency which have blockchain of their own. But the tokens can be defined as cryptocurrency that are created or brought to functionality from an existing blockchain. Let's take an example of two tokens. Ethereum is a coin which has a blockchain of its own and Shiba-Inu is a token because its been created on a blockchain of Ethereum.
Types of cryptocurrency
- Large-Cap: The currencies which have captured market-cap of over a $10 billion.
- Small-Cap:The currencies which have market capitalization of over $300 million to $2 billion.
- Metaverse: These cryptocurrencies are immersive virtual worlds with immense social and financial potential.
- Stable coins: These coins can be defined as electronic version of a actual legal tender, like USDT is coin that has a value equal to USD.
- DeFi: DeFi (Decentralized Finance) tokens represent a diverse set of cryptocurrencies native to automated, decentralized platforms that operate using smart contracts.
- NFT's: These are the cryptocurrencies which are one of their kind, might be in the form of art.
Security Of Cryptocurrencies
Security, Safety, Reliability, Privacy are some of the terms which exist in mind of every person who is new to these digital assets. Let's limpid all the doubts about it.
Cryptocurrencies are secured with the concept of Cryptography. Cryptography can be defined as methodology of securing information, data and communication using set of mathematical rules, codes and algorithms to convert the content in unique ways that it gets hard to decode it. These algorithms in this concept helps to generate a cryptographic key. This is same concept used in code generation, e- signatures and confidential transactions of Visa, Rupay cards. The message that is hard to decode is known as cipher text. The process of decoding cipher text back to message is called decryption. The process of conversion of plain text or message to cipher text is called encryption.
There are three types of cryptography, which are symmetric cryptography, asymmetric cryptography and hash functions. In cryptocurrency hash functions are used and most of the blockchains are set up on the SHA-256 (Secure Hash Algorithm).
