Cryptocurrency, in brief
What's Bitcoin ? Ether ? NFT ?
Cryptocurrency is a virtual currency secured by coding. There are a multitude of cryptocurrencies which are partly used because they make fraudulent acts almost impossible. Cryptocurrencies are instruments of speculation.
Indeed, most cryptocurrencies use blockchain technology. The blockchain is a decentralized network that everyone can consult. All transactions between users are recorded on “blocks” which form a huge chain of data.
There are two types of cryptocurrencies: Coins and Tokens. Coins are cryptocurrencies with their own blockchain and tokens are cryptocurrencies based on an already existing blockchain (most Tokens have their own interests and are based on the Ethereum blockchain)
The first and most famous cryptocurrency is Bitcoin (which, as indicated by its name, is a coin). With it, banks are replaced by algorithms carried out by mining machines which take care of securing transactions. Mining machines are devices with great computing power that control every cryptocurrency activity. The people installing their mining machine are called Miners; they are paid every day in crypto currency according to the efficiency of their machine(s).
In addition, since Bitcoin no longer depends on banks, its exchange rate is not influenced by the stock market, it follows its own course. However, there is a limited number of Bitcoins that will never change. Thus, its price depends strongly on supply and demand, which explains its high volatility.
Ether is the second most important cryptocurrency. The purpose of both cryptocurrencies is different. Etherium (the name of the Ether blockchain)
uses the cryptocurrency Ether which can be used for decentralized applications, smart contracts and the purchase of NFT (non fungible tokens)
NFTs are unique digital certificates of images, sounds or music. Even if the NFT is copied, it will not have the same value as the original. The interest of NFTs is based on its rarity. Since it can only have one owner at a time, an NFT, once bought, comes with an authentication certificate that proves its value.
You therefore buy its exclusive property.
Today, an NFT isn’t purchased for its beauty but rather to expose the means of its owner (some of them put their NFT in their profile picture for example).
An NFT can also be bought to be resold for a higher price and/or to enjoy benefits in the real/virtual world. This market is popular among artists as it is a new way to sell their art.
If you want to buy an NFT, you will first need to create a crypto wallet to exchange your euros in crypto currencies. These exchanges can be done via platforms such as Metamask or Binance for example. Each wallet has its disadvantages and advantages, it's up to you to find the one that suits you. Finally, you’ll have to go to a platform such as Opensea to buy or sell your NFTs. Once you pay the fees that go with it, you’re done!
By Perle Masri
A special thank you to Andrea Masri, a teen specialized in cryptocurrency
