Crypto world overview
With the term Blockchain we are describing a data structure that stores information in progressively chained blocks, almost like a digital registry, that is distributed on a decentralized network. This type of structure renders information permanently unchangeable, public and for open consumption from anyone who connects to the relative network. A Blockchain is quite literally a chain of blocks in which each blocks contains:
- The data stored within that block, usually of a transactional nature
- A unique code that identifies a block and certifies all of the data stored within it
- A series of metadata which includes references to the previous block
A Wallet is what contains your Cryptocurrencies; within it you can store different kinds of digital currencies and Token, receive and send to other Wallets by using a Blockchain. The public address of your Wallet is the unique reference in the Blockchain with which you can receive Crypto and Token while the private key is used to send them and is held only by you. The Cryptocurrency Wallets are integrated in different mobile applications and browser extensions, some of which are:
The term Seed Phrase refers to a precise series of words that uniquely correspond to a Wallet. Many softwares, such as MetaMask, generate a Seed Phrase for each Wallet, which must be stored with care and can also be used for a possible recovery.
A Cryptocurrency (or “Crypto”) is a digital currency that represents a certain amount of value; as with all currencies it is transferable, always fungible, and its digital form makes value transfer easy. The term derives from “cryptographic currency” since every digital currency and Blockchain infrastructure use cryptographic algorithms which are integrated in the various core processes. The main use of Cryptocurrency is to present an alternative form of (digital) money, free from any censorship or control by central authorities. Because Blockchains are decentralized, there are no institutions or groups of entities that can globally modify its functionality or ban its use. Another characteristic of some Cryptocurrencies is deflation or rather the slow and progressive reduction of the quantity that was mined and/or circulating. Consequentially, with the passing of time, a natural shortage of currency is generated.
A Token is a private digital currency distributed by a company or a group of individuals. The Token itself does not have intrinsic value but rather assumes value within the function it represents in a specific context. Various types of Tokens can change depending on their use and can represent:
- An ecosystem resource ( Utility Token )
- A portion of a company value ( Equity Token )
- The voting power in a governance context ( Governance Token )
- A unique digital property ( NFT Token )
Fiat money is a government-issued currency whose intrinsic value is determined by a Government or its issuing Central Bank . Most countries around the world use fiat money to impose their monetary sovereignty and the government-issued currency within their borders. Recently, a few countries are experimenting with the use of Cryptocurrencies (specifically Bitcoin) as their government-issued currency instead of regular fiat money.
Stablecoins are digital currencies created to maintain their own counter value anchored to that of Fiat money like the dollar or the euro. They allow users to store and transfer digital currency while maintaining its counter value stable in terms of price, since it is itself not subject to ask and bid. Some examples:
- USDT ( Tether USD )
- USDC ( USD Coin )
- BUSD ( Binance USD )
An NFT (Non-Fungible Token) is a type of Token where each singular unit is unique and differs from the others; this is why they are used to represent a digital property by uniquely associating the owner of the Token to a certain digital content. In the last few years, NFT’s have became largely utilized in the world of art, sport collecting, fashion, brands and gaming (associated to in-game content).