Understanding the basic concepts of cryptocurrencies: guide for cryptographic currency, supply, price and public key
The world of cryptocurrencies has exploded in recent years, and a growing number of investors and users who have followed the space equally. But in the midst of all emotion, it is crucial to understand the basic concepts of this complex market. In this article, we will explore the basic concepts of cryptocurrencies, including the general offer, market capitalization, public key and more.
What is Crypto?
Crypto Courrency is a digital or virtual currency that uses cryptography for safe financial transactions. This is decentralized, which means that it is not controlled by any government or institution. Instead, transactions are recorded in a public book called Blockchain. The most famous curine is Bitcoin (BTC), but other popular currencies include Ethereum (ETH) and Litecoin (LTC).
Total supply
The total supply of the crypto currency refers to the maximum number of units that can be created. This may vary according to the fundamental protocol or algorithm, such as the original Bitcoin supply 21 million. For example:
- Bitcoin: 21 million
- Ethereum: 120 billion (with a theoretical limit of 1 billion)
- Litecoin: 84 million
Market capitalization
Market capitalization is the total value of the remaining cryptocurrencies. It represents how much money they are willing to invest in that particular currency. For example, Bitcoin market capitalization has varied significantly over time.
| Date | Market capitalization (in USD) |
| — | — |
| March 2017. | 7000 – 8000 |
| June 2020. | $ 2.5 billion |
Public key
The public key is a unique identifier for a cryptographic currency that can be used to verify the transaction in the blockchain network. This is basically a digital impression of an individual account or wallet.
- The public key (PK) is generally presented as a couple, which consists of a private and public key.
- Private key: Only the holder has access to this private key, which allows them to transfer funds.
- Public Key: Anyone can verify transactions in the Blockchain network using their public key.
How does it work **
Here is an example of illustration how Crypto is doing:
- Alice creates a new cryptographic currency called “bitcoin” and shares its wallet address with Bob.
- When Bob wants to send Bitcoin to Charlie, he uses his private key (public key from Alice) to create a transaction in the Blockchain network.
- The transaction is transmitted on the network, where it is confirmed by knots using complex algorithms.
- After verifying, the transaction is added to blockchain and confirmed as valid.
- Charlie Primcoin de Alice and can use it to buy goods or services.
Conclusion
Understanding the basic concepts of cryptocurrencies is crucial for anyone interested in this space. By understanding concepts such as the total offer, market capitalization and public key, it will be better equipped to move in the complex world of the cryptography trade truck. Remember, the investment in cryptocurrencies transmits risks, so always investigate and consult a financial advisor before making any investment.
Additional resources
- CoinmarketCap: Comprehensive Crypto Data Database, including market data, prices and market capitalization.
- Cryptocompa: platform that provides real -time courses, market data and tools for cryptocurrency investors.
- Investopepedia: a reliable Internet resource to learn about investment in cryptocurrency currency and other financial markets.
