The Basics of Bitcoin, cryptocurrency, and NFTs

The Basics of Bitcoin

Bitcoin is a digital currency and was founded in 2009. The vision behind the bitcoin was a transfer of online payment from one party to another without going through any financial institutions. Not many countries are using bitcoin as their primary currency but there are some countries whose primary currency is bitcoin and are using bitcoin for the exchange of goods,  property, etc. Bitcoin is improving day by day There are many other digital currencies but bitcoin is on the top of the list. There are over 20,000 cryptocurrencies every month a new cryptocurrency is added. There is a country named EL Salvador whose official currencies are bitcoin and U.S dollars.

Benefits of Bitcoin

• Bitcoin is well known and is accessed easily anywhere.
• Bitcoin is decentralized so it means there is no other authority to regulate it or impose taxes.
• Bitcoin prices change very quickly it can benefit you in seconds.

Cryptocurrencies

• Cryptocurrencies are digital currencies that enable the direct transfer of money from one party to another without involving banks or other entities. There are different types of cryptocurrencies in the market. Bitcoin is a famous cryptocurrency. Some other major cryptocurrencies are Ethereum, Ripple, and Altcoins. Litecoin etc Cryptocurrencies are introduced to transfer paper currency to digital currency. Blockchain technology in bitcoin is a major technology without blockchain technology we cannot create cryptocurrencies. Bitcoin and Ethereum have their blockchains.

Benefits of Cryptocurrency

• You can transfer money to anyone faster.
• It is cost-efficient and has a relatively lower cost than other financial services.
• It is easily accessible to anyone living anywhere.
• It is highly secured and no one can access your transactions unless they can hack your private key.

Bitcoin vs Altcoin

• Altcoins are different from bitcoins.
• Every other Cryptocurrency you hear about other than bitcoin is an altcoin.
• Bitcoin was the first decentralized cryptocurrency that ever existed.
• The price of bitcoin is comparatively higher than any altcoin

NFT

A non-fungible token is a information in blockchain which is linked with computerized specific assets. After knowing the basics of bitcoin and cryptocurrency you must know about NFT’s.

Token

The token is just like a chip that is used in different clubs, a casino that is valid only inside the club and nowhere else same as the case for tokens.

The only difference between these chips and tokens is that these chips are made up of plastic while the token is digital.

Chips can easily be destroyed because they are made up of plastic so you can touch them on the other hand token does not exist physically so they cannot be destroyed it is a digital asset and is very safe compared to chips.

Through the evolution of blockchain technology, these digital tokens came into existence.

Fungibility

If you want to exchange the asset with another one then you must have the other asset with similar worth and features. This is fungibility.

For example, Bitcoins are fungible so they can be replaced by another.

Functions of NFTs

• When some user purchases NFTs they become the owner of that NFT. Blockchain technology records this transaction.
• The owner of the certain NFT can sell the NFT to another person and the ownership from that person will be transferred to the person who purchases the NFT.
• Now the NFT belongs to the person he/she can do business with that NFT.

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