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Digital currency or cryptocurrency refers to a system that transfers money electronically. One of the most interesting features of digital currency is that it does not rely on central banks to form new units. Of course, transactions in the digital currency system are recorded in a distributed ledger called blockchain. In this article, we will tell you about digital currencies from zero to one hundred and we will tell you what digital currency is and what it is used for.
What is digital currency in simple words?
Digital currencies are currencies that are encrypted with protocols. These currencies do not belong to any country and are completely decentralized. Digital currencies are based on the blockchain network and the purpose of their production is to prevent fraud and forgery.
Digital currencies were invented when experts were studying and researching digital currencies. The first digital currency introduced to the market was Bitcoin. Today, apart from Bitcoin, hundreds of other digital currencies are also used as digital money. These funds can be used in a decentralized platform.
But you may ask what is meant by the decentralized nature of this system? In response to your question, we must say that all financial transactions in this network are based on blockchain. This system works like a huge ledger where the transactions made by users are fully recorded and everyone will know about it. In this way, no one can make a change in this registered information. In addition, the new transactions that are going to be recorded will be approved by the users of the blockchain, and this is all an advantage for digital currencies.
What is the story of digital currency? Where did the story begin?
Have you ever heard of digital currencies? Do you know how and for what purpose digital currencies entered the modern world today? It is said that digital currencies were first introduced in 2009. In this year, a programmer named “Satoshi Nakamoto” invented the first digital currency, Bitcoin. You may know Satoshi as the top inventor of the blockchain network. Blockchain is the technology on which digital currencies are formed. He was the first person who proposed the idea of creating blockchain.
“Satoshi” designed the blockchain with the aim of solving the problem of double spending in digital currencies. The problem of double spending was due to the easy copying of digital information, and based on that, the holder of one currency would spend it instead and use his special code elsewhere. Therefore, Satoshi decided to design blockchain and develop digital currencies as decentralized money.
What is the most important feature of digital currency?
Digital currencies, which have attracted the attention of many capitalists these days, have characteristics that are not bad to know. In this way, your awareness about them increases.
Features of digital currencies:
Cryptocurrencies are not owned by any company or institution and are not affiliated to any particular country. Therefore, there is no need to obtain a license to buy and sell them.
Cryptocurrencies have no geographical limitations and are global. Therefore, users can transfer it from one point of the world to another.
Transactions made with digital currencies are irreversible. Once users confirm a transaction, they cannot undo it.
The security of digital currencies is very high. In fact, in this market, each user is responsible for maintaining his assets and cannot access the money of other users.
Digital currencies are anonymous. It is almost impossible to identify people in the digital currency market, and this is a bonus for investors.
What is digital currency mining?
In explaining the answer to the question of what digital currencies are, we mentioned the decentralization of these currencies. In addition, the immutability of their blockchain and the transparency of these currencies are important features of digital currencies that are designed on the basis of cryptography. But do you know what digital currency mining is?
Digital currencies are obtained by mining. This process is monitored and controlled by experts. These people use well-equipped computers to mine digital currency and mine digital currency with difficult and complicated methods.
In the process of mining digital currencies, we are facing a concept called hash. In the blockchain network, each block of information is linked to the previous block with a hash mechanism. The mined blocks are added to the blockchain.
Mining of digital currency is done with highly advanced computers. These computers are called miners. It is worth noting that digital currency mining with a miner consumes a lot of electricity, and for this reason some countries manage its mining by imposing restrictions. This is one of the important concerns that miners (digital currency miners) face.
What is a miner in digital currency?
As mentioned, a miner is used to extract cryptocurrencies. Another name is Ace Miner. This word means integrated circuits. Today, there are many different Bitcoin miner models in the market, from which Bitcoin mining is done in the easiest possible way.
Digital currencies are mined in units called blocks. It is said that the reward for mining each block of Bitcoin is 12.5 Bitcoins. In recent years, prominent and well-known brands have been working in the field of producing the best miner systems, which include Watts Miner, Bitmain, and E-Bang.
Many of those who intend to buy a miner want to know how the miner’s income is? In response to these dear ones, we must say that this income depends on a set of parameters, the most important of which are the dollar price, hash rate, and bitcoin price.
What are the types of digital currency?
Digital currencies are divided into three general categories. Bitcoin, altcoins and tokens. We will learn more about these currencies in the following. In the previous episodes, we got acquainted with Bitcoin.
Now it’s time to introduce two more types of these currencies:
Altcoins: Altcoins are cryptocurrencies, each of which has its own blockchain. Altcoins are actually a branch of Bitcoin.
Tokens: Tokens are divided into two categories. Utility tokens and security tokens. These tokens have their own uses and were given to investors in the process of offering coins.
The point that we should mention here is related to Ethereum. Ethereum is one of the currencies that did not use Bitcoin codes for its design. Therefore, its applications in the cryptocurrency market are beyond a digital currency.
What is the most famous digital currency?
Years have passed since the first day when the first digital currency named Bitcoin was invented and presented to the market. Today, more than 2,200 digital currencies have been introduced to the market, each of which has a specific position in the cryptocurrency market. From the very beginning, some of them managed to be at the top of the top cryptocurrencies table and found countless fans. But others have been dismissed as dead projects. How many of these cryptocurrencies do you know?
Popular cryptocurrencies:
Bitcoin: Bitcoin is not only the oldest, but also the most important and well-known cryptocurrency in the market. This digital currency was in the center of everyone’s attention from the very beginning and still maintains its position as the first cryptocurrency.
Ripple: Ripple is designed for fast and low-cost transactions. This platform, presented in 2012, is a type of banking system that supports common currencies in its network. The name of the Ripple coin is XRP.
Ethereum: Ethereum was designed by Vitalik Buterin. Ethereum was introduced to the market in 2014 and its network was launched a year later. Ethereum’s symbol is ETHER. Many use it to create tokens.
Stellar: Stellar is a peer-to-peer network that operates in a decentralized platform just like Bitcoin and is very popular among currency buyers.
Bitcoin Cash: Bitcoin Cash is one of the famous forks of Bitcoin. This cryptocurrency was designed in 2017 by changing the block size.
Cardano: The Cardano blockchain is known by the symbol ADA. This cryptocurrency entered the world of digital currencies in 2017. If you pay attention to the ranking of digital currencies in this market, you will notice that Cardano has taken the fourth place in this ranking. Cardano was designed by Charles Hoskinson. He was one of those who put blockchain development on the agenda.
Litecoin: “Charlie Lee” designed Litecoin with the aim of faster payments. This work was done by applying changes to Bitcoin coins. Litecoin, which is one of the oldest altcoins, is also known as digital silver.
Polkadat: Polkadat is introduced to the market with DOT symbol. This digital currency was officially unveiled in 2020. This cryptocurrency has put the financing of the network on the agenda. It is interesting to know that mining Polkadat cryptocurrency is very similar to buying and proving shares.
Binance Coin: The abbreviation of Binance Coin is BNB. Binance exchange is the designer of this popular digital currency. People who have Binance Coins in their wallets can easily pay their transaction fees on Binance Exchange.
Dogecoin: The Dogecoin cryptocurrency, whose symbol is DOGE, was created with the purpose of transferring assets. Today, famous people such as Elon Musk support this cryptocurrency and this has made Dodge famous.
Tether: Tether is a stablecoin whose price stability is one of its important features. Tether is highly dependent on the price of the US dollar. This currency is easily circulated between exchanges and wallets, and easy transfer is one of the main characteristics of Tether.
What is Binance exchange in digital currency?
Binance can be considered one of the most popular digital currencies that was founded in China. Of course, in 2017, when the Chinese government restricted digital currency exchanges, it moved its office to Japan. Binance is currently operating in the European Union. The valuable actions of the Binance exchange made it quickly gain the title of the largest digital currency exchange. Binance exchange owes part of its success to the efforts of CZ, the CEO of the exchange, who works in a completely professional manner in this field.
Binance exchange has started and successfully completed many projects, and this has made it more famous than before. One of the most important of these projects is the Binance Academy, which, along with the Binance exchange, has been able to provide valuable services to its users. In addition, the charity based on Binance and the research institute that launched this blockchain are among the important achievements that this exchange has achieved.
As mentioned in the previous sections, BNB digital currency is one of the well-known tokens designed by Binance itself. BNB experienced a 400% growth in the first months of its launch and became one of the top digital currencies. Binance Exchange has promised to unveil its two new products, which include Binance DEX and Binance Chain, soon.
Digital currency book
The digital currency market is always facing fluctuations. The price of a cryptocurrency may increase or decrease several times in one day and this is a warning for those who want to enter this market.
Entering this fledgling market, which has gained indescribable popularity these days, requires gaining sufficient awareness and knowledge in this field. If you are not familiar with the strategies of buying and selling digital currencies and enter this field without any intellectual support, a hard failure will await you.
Of course, despite the cryptography used in digital currencies, there is no possibility of fraud in this market, but nevertheless, many users have lost their capital in this market, and the reason was ignorance and haste in making decisions.
Fortunately, these days there are many centers in the country that offer free digital currency training. You can use these trainings to increase your knowledge and step into this field with knowledge.
The digital currency book is an important resource that provides you with useful information related to digital currencies. If you read this book and similar resources, you will know what digital currency is and how to get rich using it.
What are the best published books on digital currencies?
Crypto Assets, by Chris Burnisk and Jack Tatar
Bitcoin Mastery, by Andreas Antonopoulos
The Bitcoin Standard, by Saifuddin Amos
Digital Currency and Bitcoin Technologies, by Arvind Narayanan
The Age of Digital Currency, by Paul Vigna and Michael J. Casey
One Satoshi, by Mohammad Azarnivar and Nima Malekpour
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