Crypto 101: Basic of Crypto and Blockchain

Introduction to Crypto and Blockchain: A Beginner’s Guide

As we are moving towards understanding the whole structures and the mechanisms of blockchain technology, let us first understand the basic concept of it. Welcome to the world of cryptocurrency and blockchain, the real-life Grand Line of technology where it has not been fully explored and utilised, filled with uncertainties yet mesmerizing potentials of human discoveries.  Whether you’re a seasoned investor or a curious newcomer, understanding the basics is crucial. This article post will walk you through the fundamental concepts and terms you need to know. To those whom already knows, well, it serves as a reminder if anyone wants to check.


So what is Cryptocurrency?

Cryptocurrency is a digital or virtual form of currency that uses cryptography for security. Unlike traditional currencies, cryptocurrencies operate on decentralized networks based on blockchain technology. The most well-known cryptocurrency is Bitcoin, but there are thousands of others, including Ethereum, Litecoin, and Ripple. The values of each cryptocurrency differs from each other depending on its utilities as well as its needs and demand. The scarcity of Bitcoin makes it the most highest in value cryptocurrency leading other existing digital currencies. As the firstborn, the trailblazer, the recognitions as well as the dominance, basically, you may say Bitcoin is the father of all cryptocurrency.


What is Blockchain?

Blockchain is the underlying technology that powers cryptocurrencies. It is a decentralised and distributed ledger that records all transactions across a network of computers. Each transaction is grouped into a “block” and linked to the previous block, forming a “chain” of blocks. This structure ensures transparency, security, and immutability. Immutable records means that once a transaction is recorded, it cannot be changed or tampered with. If an error occurs, a new transaction must be added to reverse it, and both transactions remain visible. This is what makes it beautiful, as everything is transparent, it is publicly-available for EVERYONE to be able to refer to any transaction. Unlike traditional business networks, where duplication of effort is common, blockchain ensures that transactions are recorded only once.


So how does it actually works?

  1. Each transaction becomes a “block” of data, recording details like who, what, when, and where.
  2. These blocks form a chain, connecting to previous and subsequent blocks.
  3. As the end result, the entire chain confirms the exact time and sequence of transactions, ensuring security and immutability.


Common Key Terms to Know

Technically, there are few jargons in crypto space that we need to master and fully understand, embedded to our mind deeply so it will be encrypted in our memory. These are several basic terms that is commonly used in Web 3.0 multiverse, they are;

  • Block: A container for a set of transactions. Each block is linked to the previous one, forming a chain.
  • Decentralization: The distribution of power and control away from a central authority. In blockchain, this means no single entity controls the entire network.
  • Peer-to-Peer (P2P): A network where participants interact directly with each other without intermediaries.
  • Smart Contract: Self-executing contracts with the terms of the agreement directly written into code. They automatically execute and enforce the terms when conditions are met.
  • Mining: The process of validating and adding new transactions to the blockchain. Miners use computational power to solve complex mathematical problems.
  • Wallet: A digital tool that allows users to store, send, and receive cryptocurrencies. Wallets can be software-based (online) or hardware-based (offline).
  • Private Key: A secret code that allows you to access and manage your cryptocurrency. It must be kept secure.
  • Public Key: A cryptographic code that allows others to send cryptocurrency to your wallet.
  • ICO (Initial Coin Offering): A fundraising method where new cryptocurrencies are sold to investors in exchange for established cryptocurrencies like Bitcoin or Ethereum.
  • Token: A digital asset created on a blockchain. Tokens can represent various assets, including currency, property, or even voting rights.
  • NFT (Non- Fungible Token): A special cryptographic token recorded on a blockchain, which are interchangeable, non-fungible with each NFT being distinct to one another.
  • Stablecoin: A type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset like the US dollar.
  • DApp (Decentralized Application): Applications that run on a blockchain network rather than a centralized server.
  • Consensus Mechanism: The process used by blockchain networks to agree on the validity of transactions. Common mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).


Why Crypto and Blockchain Matter

Cryptocurrencies and blockchain technology have the potential to revolutionize various industries by providing more secure, transparent, and efficient systems. From finance and supply chain management to healthcare and voting systems, the applications are vast and continually expanding. As of my own experience, I've delved quite deeply into the Blockchain gaming space, which I'll share in another article.

Conclusion

Understanding the basics of cryptocurrency and blockchain is the first step in navigating this exciting and rapidly evolving field. As you continue to explore, you’ll discover new opportunities and innovations that can transform the way we interact with technology and each other. As I myself is still a noob in crypto-space, there is vast things to be learn and experience in the world of blockchain. I intend to share those experiences, good or bad, either as a frontier or as a laggard. I've developed my interest in Blockchain since the spark of COVID-19, and only just recently I've decided to write about it. I was late when I explored this space, and I am still being late in sharing these info as compared to thousands and millions of other articles and videos sharing on crypto. Notwithstanding this, better to do it late than to never do it at all!


Stay tuned for more in-depth articles and guides on specific topics within the crypto world (probably most will talk on gaming space). Happy learning, and welcome to the journey of becoming a crypto expert!

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