Here at BCB Group, we’re driven by our mission to connect and bank the global crypto economy, which is why we’re looking to create guides, just like this one focusing on cryptocurrency for beginners, on all of the biggest talking points in the industry.
In this post, we’re going to be creating a beginner’s guide to crypto.
Cryptocurrency is defined as any form of currency that only exists virtually or digitally, using cryptography to process and secure transactions between senders and recipients. A cryptocurrency will not have a central issue system or a central regulatory authority, giving the community greater control over the assets. Instead, crypto uses a decentralised finance system to record transactions and issue brand new units of the currency – this is often referred to as blockchain technology.
Cryptocurrencies can be used to purchase goods and services or held as part of an investment strategy, but they cannot be manipulated by a central authority because none exists. Your cryptocurrency will stay secure regardless of what happens to a government.
What are the different types of digital currencies?
Of course, there isn’t just one single type of cryptocurrency – there are lots of different currencies that can be used for different functions or as alternative investment opportunities, making each type of currency a unique investment.
But what are the most common digital currencies that currently exist on today’s exchanges?
Up first, we have Bitcoin.
BTC is the trailblazer in the crypto industry – it was the first major currency to gain any traction and has paved the way for an entire industry and ecosystem of digital currencies across the globe.
At the time of writing a single Bitcoin is worth £24,174.60, whilst the highest Bitcoin cost ever recorded (October 2021) was £49,148.38 during the crypto market’s monumental boom towards the end of 2021.
Ethereum is a decentralised global software platform based on blockchain technology at its heart. Its native cryptocurrency, ether, or ETH, is the most well-known. Anyone can use Ethereum to construct decentralised protocols like smart contracts.. Ethereum blockchain and Ether cryptocurrency has been central to the development of the DeFi ecosystem.
Scalable, programmable, secure, and decentralised are all features of Ethereum. It is the blockchain of choice for developers and businesses who are using it to build technology that will transform the way many sectors run and how we go about our daily lives.
According to its website, Tether (USDT) is a cryptocurrency stablecoin tied to the US dollar and backed “100% by Tether’s reserves.” Tether is controlled by iFinex, a Hong Kong-based firm that also operates the BitFinex cryptocurrency exchange.
Tether was originally known as RealCoin and was rebranded as Tether in November 2014. In February of 2015, it began trading. Tether, which was founded on the Bitcoin blockchain, now supports the Omni and Liquid protocols of Bitcoin, as well as the Ethereum, TRON, EOS, Algorand, Solana, OMG Network, and Bitcoin Cash (SLP) blockchains.
Tether’s USDT accounted for two-thirds of Bitcoin exchanges by value in April 2022.
Binance Coin (BNB)
Binance currency was originally an ERC 20 token on the Ethereum blockchain, but it has since become the Binance chain’s native coin. It was launched in July 2017 as part of an initial coin offering (ICO) with a cap of 200 million BNB tokens. Through the ICO process, it provided 10%, or 20 million BNB tokens, to angel investors, 40%, or 80 million, to the founding team, and the remaining 50%, or 100 million, to the various participants.
Almost half of the funds raised during the ICO were intended for Binance branding and marketing, with the remaining one-third going toward building the Binance platform and making essential changes to the Binance ecosystem.
To achieve price stability, stablecoins are frequently backed by reserve assets such as dollars or euros. USDC’s price stability stands in stark contrast to other cryptocurrencies’ famed price volatility, such as Bitcoin and Ethereum.
It is vital to clarify that USDC is not issued or supported by the United States government, despite its name. USD Coin is an open-source project, which means that anyone can look at the code and contribute to it.