What is Crypto? All information about Crypto Market - Market247.io
The cryptocurrency market is gradually getting more and more dynamic. To get rich, many people decide to invest in the cryptocurrency market. But there are also many possible threats in this market. So what is Crypto? What are the characteristics of the crypto market? Let’s find out more useful information with Market247.ioin this article.
What is Crypto?
What is Crypto is the question of many newbies. Crypto or cryptocurrency is a form of electronic money issued on blockchains and used as a means of transaction on blockchain platforms.
The outstanding feature of crypto is thanks to the use of the database encryption system of Blockchain technology, making information about transactions always secure, and cannot be changed or deleted. In other words, Crypto is a form of digital asset built on a distributed network over a large number of computers. The decentralized structure allows crypto to not be manipulated and controlled by any third party.
Especially, anyone can create cryptocurrency. However, the currency is only really valuable when it is accepted by the community and widely used.
This is an answer for the question: What is crypto market?
What are the characteristics of Crypto?
To better understand what is crypto, we will find out what are the characteristics of crypto.
- Decentralization: Crypto is a cryptocurrency and it does not work like fiat money, not governed by a central server. Crypto is distributed on a network with the participation of many peer-to-peer computers. This creates decentralization for the crypto market.
- Peer-to-peer: Investors directly transact with each other without going through a controlling 3rd party. This increases fairness while increasing processing speed.
- Anonymity: When participating in the cryptocurrency market, investors do not need to provide personal information. At the same time, the transactions are not controlled by any individual or organization.
- Digital assets: Crypto is a form of digital assets, all purchases and sales transactions between users are done on the internet space.
- Global: Decentralized and not controlled by any country, crypto transactions can be done anywhere in the world.
Advantages and disadvantages of the crypto market
Crypto is gradually becoming the investment choice of many investors. However, crypto still has advantages and disadvantages. To understand what is crypto clearly, let’s find out the advantages and disadvantages of crypto.
- Fairness: When trading in the crypto market, users can easily buy and sell directly without having to go through any middlemen.
- Convenience: Users can make transactions at any time with just a smartphone with an internet connection
- Fast and low-cost transactions: When participating in the crypto market, investors can transfer money quickly and at very low costs from one country to another.
- High level of safety and security: As mentioned above, crypto is a cryptocurrency built on the blockchain platform, so the data is highly secure and cannot be changed by any individual or which organization.
- Despite its growing acceptance, cryptocurrencies are still not accepted in many countries around the world
- Large and continuous price fluctuations require investors to monitor and update market information continuously
- Easy to Lose: It is the constant volatility of the market that makes investing in crypto very risky. Therefore, investors need to be equipped with solid knowledge before participating in this market.
Types of Cryptocurrencies
To understand deeply about What is Crypto market, let’s answer the question that: What are the cryptocurrencies in the crypto market? Currently in the cryptocurrency market there are two main ways to classify cryptocurrencies:
- Bitcoin and Altcoin
- Coin and Token
We will explore the difference between these two classifications.
Bitcoin and Altcoin
- Bitcoin: This is the world's first cryptocurrency and the coin that laid the foundation for the crypto market. Bitcoin is released as open source, using a peer-to-peer protocol to transact directly between users without the control of an intermediary.
- Altcoin: Altcoin refers to all cryptocurrencies other than Bitcoin, developed as an alternative to Bitcoin. For example: Solana, Ethereum, Chainlink, MakerDAO…
Coin and Token
- Coin: A currency that is developed on a separate blockchain and operates completely independently. Coin is developed for the purpose of payment, finance, application development, security ... of the blockchain itself. At the same time, each blockchain has only one coin.
- Token: Token is also a coin issued on the blockchain, but instead of having its own blockchain, the token is built on top of another blockchain. Some tokens, when it is time to grow strong enough, will break away from the original blockchain and build their own blockchain for that token. At that time, the token will become a coin.
- Coin is built as a medium of exchange and store of value for payment, investment and development purposes of a specific Blockchain project. It is for this reason that each blockchain has only one base coin.
- Token owns all the features of the coin, and it has many more utilities depending on the purpose of each project.
Coins need a separate wallet platform, and when transacting, the transaction fee is deducted directly from the coin's wallet. In contrast, Token does not need to have its own wallet, but it uses the wallet of the platform coin, the transaction fee will be deducted from the wallet of the platform coin.
What is crypto exchange?
A crypto exchange is a place where digital asset exchange transactions take place. At the moment, the crypto market has 2 types of exchanges:
- Centralized Exchange (CEX): This is an exchange with 3rd party intermediaries controlling crypto asset exchanges. The current popular CEX exchanges are used by many users such as Binance, Huobi, Kucoin, Gate.io...
- Decentralized Exchange (DEX): Contrary to CEX exchange, DEX is an exchange built and operated in a decentralized manner based on blockchain and without any third party intervention.
Types of storage wallets
After understanding what is Crypto, we will learn about the types of wallets that store crypto assets.
Hot wallet is a type of wallet stored in online form, users keep a Private Key to secure their assets. The advantage of this type of wallet is its high convenience, being able to install itself on electronic devices. However, an important disadvantage of this wallet is that it is easy to hack if the computer or phone is infected with a virus.
Currently, the hot wallet has been integrated with many more features such as direct swap on the wallet, portfolio creation, portfolio tracking, support for many different tokens, etc.
A cold wallet is a physical wallet that can be held. Cold wallets are especially suitable for long-term investors who do few transactions. But in return, a huge advantage of cold wallets is extremely high security.
Exchange wallets are wallets created on exchanges where users do not directly hold Private Key, so there will be risks such as scam floors, or suddenly being shut down without being able to withdraw money. However, the exchange wallet is still used by many people because of its convenience.
What to prepare when investing in crypto?
To invest in the crypto market, you need to understand what the crypto market is, how it works, as well as the most reputable exchanges. Here are 3 things you need to prepare to enter the cryptocurrency market.
Knowledge of the crypto market
As mentioned above, participating in the crypto market can make you rich quickly, but it also makes you lose all your assets. It is the constant volatility that makes the crypto market potentially full of risks. So, the first thing you need to prepare is a solid knowledge base of the market. Crypto knowledge is extremely vast, requiring you to have patience, honing every day to get used to how the market works.
Asset security Before making a profit, make sure you keep your money safe. Crypto market always exists many forms of scams, scam projects… Therefore, you need to protect your assets.
- Before making a transaction, you need to double check the security of the exchange
- Before buying any coin/token, it is necessary to check the project information, development potential as well as the reputation of the project.
Fund to invest
The crypto market is very risky, so you should only invest with idle money, if the risk of loss will not affect too much.
Above is the entire basic knowledge of the crypto market. Crypto is a way to get rich quickly, but it also comes with a lot of risks. So you need to prepare knowledge before deciding to enter the market. Market247.io believes that through this article, you have been able to answer the question of what is Crypto, what is Crypto’s feature. Don’t forget to follow Market247 to update useful knowledge from the crypto market.
FAQs about What is Crypto?
What is the difference between Bitcoin and Crypto?
Bitcoin is the name of the most famous cryptocurrency, which is the invented blockchain technology. A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses cryptographic techniques to control the creation of currencies and to verify transfers.
Is crypto knowledge difficult?
Contrary to popular belief, the cryptocurrency market is the most difficult market to trade for beginners. Therefore, equipping knowledge is extremely necessary.
Market247.io is a channel that universalizes blockchain and crypto understanding to the community. We provide useful knowledge from basic to advanced for all who want to dive into the blockchain and crypto market. Market247.io firmly believes that An investment in knowledge pays the best interest.
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