What Is Cryptocurrency [And How Does It Work]? Simple Tutorial About What Cryptocurrencies Are – Bitcoin Ethereum Cardano Tether Solana etc
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Here is the full transcript from the video;
What Is Cryptocurrency?
Bitcoin was the first-ever cryptocurrency, launched by an anonymous individual known as Satoshi Nakamoto in 2009. Today, there are over 15,000 cryptocurrencies (including Ethereum, Cardano Polygon and many more) and they’re being used by millions of people around the world in a myriad of ways. Some are even recognized as legal tender in certain countries. But what exactly is Cryptocurrency?
Built on the blockchain, cryptocurrencies are a digital form of currency or asset that are entirely decentralized, meaning that they do not rely on the same institutions for creation and distribution as traditional currencies, which are often referred to as “fiat” currencies. Unlike fiat currencies such as USD GBP and Euro, cryptocurrencies do not rely on governments, central authorities, or retail banks in any way. Not only can anyone create their own cryptocurrency, but anyone with an internet connection can receive, hold, and send cryptocurrency peer to peer almost instantly without the need for the involvement of centralized institutions. To understand exactly how this can happen, be sure to watch our video on how blockchain technology works.
Most cryptocurrencies have a fixed total supply, and although this supply is often slowly released over several years, the maximum total number of coins cannot be exceeded. Unlike with fiat currencies, once the total supply is set, and once the full supply is in circulation, no “new” supply can ever be created. This has advantages over fiat currencies that suffer from inflation as more and more of the currency is pumped into circulation, thereby reducing its value over time. In addition to having a fixed total supply, some cryptocurrencies even have deflationary mechanisms built into them, whereby coins are burned and taken out of circulation forever meaning that the total supply of the token actually reduces. This increases the scarcity of the token and potentially adds to the value of the remaining supply.
Whilst the decentralized nature of crypto assets has many benefits, one downside is that because the currency is not backed by a major economy, they are far more volatile than fiat currencies. This means that large gains and losses can occur very quickly, as measured against fiat currencies at least. Some cryptocurrencies have emerged that try to stabilize their price and therefore keep a steadier value against fiat currencies. Such cryptocurrencies are called stable coins.
Whilst it’s true that there are currently over 15,000 cryptocurrencies in use today, using the term “crypto-currency” is not very accurate, and the term “crypto-asset” is probably a better way to describe most of these tokens. Most crypto assets have their own defined use cases other than being a form of currency, and whilst some may eventually be recognised and used as accepted currencies around the world, most will never be recognized as such, but will be used in a vast number of ways as defined by the project they’re attached to.
For example, our native Weave token can be used on the Weave dApp to unlock certain features, it can also be held to reduce platform fees, and staked to receive yield and a share of company profits. Technically, it could be used as a form of payment for items in the real world, but its intended use cases are quite different from that.
If you’d like to know how to generate a passive yield from crypto assets then make sure you head over to our website at weave.financial, where you can build your own yield farming strategies f, or you can simply copy other users to earn yield and compound your gains on complete autopilot.
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We hope you like this video explaining What Is Cryptocurrency [And How Does It Work]? Tutorial Bitcoin Ethereum Cardano Tether Solana etc.