Stories of the rapid growth of crypto or digital currencies are very common among young investors these days, although few really understand how the cryptocurrency world works. Today, young people around the world have a very strong desire to know the crypto process quickly so that they can start mining quickly – or in this case ‘mining’ – money quickly. As a result, they return to the Internet for answers.
But, searching the internet does not always help to get the basics about crypto functionality right. Also, watching expert videos and taking notes from analysts is sometimes not helpful.
So, what is the possible way? Redd Product leader Peter Yang, in his blog post ‘The Curious Beginner’s Guide to Crypto’, gave a simple answer: “It’s easier to learn from a beginner who is interested than an expert who speaks the text.” His blog goes by the name of “Creative Economy”.
Ever wanted something a bit different for your web site and wanted to know how crypto works?
I wrote a breaking post:
2. Blockchain (wallets and keys, stock against work certificate)
Let’s go inside … https: //t.co/BzyKGUbbMy
– Peter Yang (@petergyang) September 29, 2021
In his post, Mr Yang, who calls himself an “enthusiastic beginner”, said: “My goal is to ‘interpret myself as five’ (crypto comments): Web 3; Black Chain; Bitcoin and Ethereum; NFTs; and DAOs.”
To begin with, he quoted American businessman and investor Ben Horowitz: “Crypto has a feature that has never been seen before – trust.”
“If trust can build trust, creators do not have to trust intermediaries. They: do not have to trust banks to get money; they do not have to trust lawyers to draw a contract; trust social networks to make a living.”
To verify the above statement, Mr Yang described in detail, “The owner is coming with confidence. By reducing the intermediary tax, creators and fans can finally be reversed from their work.”
Explaining the concept of ‘Web3’, Mr Yang said: “The best way to describe Web3 is to compare it to Web2. Internet 2 is dominated by the Internet and technology companies today. Get value from users.
He added, “The Internet is pioneered by crypto. It creates computer networks that talk to each other using blockchain technology without intermediaries.”
In blockchain, Mr. Yang said, “A blockchain is a linked list of transactions stored on a computer’s network. ) ‘.
Citing an example, he said, “Suppose Bob wants to send 1 bitcoin to Mary. Both Bob and Mary need crypto wallets. These wallets are software (e.g., Coinbase, Metamask, Rainbow) or hardware (e.g., Ledger).” , Bob says in his wallet: ‘I want to send 1 bitcoin from my public address to Mary’s public address.’ Second, Bob’s wallet creates a digital signature for this transaction based on his personal key. Third, this signature proves that Bob actually owns 1 bitcoin. It then works with other nodes to add volume to the blockchain.After completing all three steps Mary finds 1 bitcoin in her wallet.
He added, “The most important place when it comes to wallets and keys: you can share your public key with others to send and receive transactions. However, you should never share your private key or seed phrase. If someone approaches these artifacts, they can make transactions on your behalf.”
“A block can only be added to the blockchain if the other nodes agree,” he added.
‘Fungible Vs. To clarify about ‘non-fungal tokens’, he said: “Fungible tokens are interchangeable (eg, Bitcoin, Ether). Non-fungal tokens (NFTs) are unique (e.g., an art). Watch the game: Funking Tokens Virtual currency of the game (eg VBucks, Robux)
To distinguish between Bitcoin and Ethereum (fungal tokens or cryptocurrencies), he said, “Bitcoin uses blockchain, so it is decentralized, unchanged and open. There will always be only 21 million bitcoin.” Bitcoin was created in 2009 by Satoshi Nagamoto (a nickname).
Ethereum, created by Vitalik Buterin in 2013, is, he said, a digital token. “Ether is a valuable store like Bitcoin, but its main purpose is to reward the nodes in the etherium blockchain for processing transactions. Gas is the amount of ether that is paid to the node to process a transaction,” he added.
Explaining non-fungal tokens or NFTs, he said, “An NFT is a record of ownership of a unique asset. Anyone can see the history. “
Among DAOs, Mr Yang said, “A DAO is a community with a treasury owned by its contributing members. The simplest way to describe how a DAO works is to compare it to a company.”
Traditional Vs Crypto Economy
In conclusion, Mr Yang compared the traditional economy to crypto and compared money (US dollars) to fungal tokens (bitcoin and ethereum). He compared factories, machinery and software (manufacturing assets) to ‘smart contracts’; Food, clothing and television (supplies) for NFTs; E-commerce, retail stores and stock market (exchange mechanisms) decentralized exchanges, auctions, order books conducted by smart contracts; And government, central banking institutions (DAOs) to DAOs in the crypto economy respectively.