The Fundamental Analysis of Cryptocurrency
Cryptocurrencies are a new, complex, and rapidly-growing market. They require a high level of technical knowledge and expertise to understand how they work and where their value lies. Luckily, this guide will teach you all the fundamentals of cryptocurrency with easy-to-understand concepts so that you can become a pro in no time.
Understanding the Blockchain
The blockchain is the foundation of cryptocurrency, and understanding how it works will help you fully grasp how cryptocurrencies work. What is a Blockchain?
A blockchain is a database that stores information about all transactions in an encrypted form. It keeps track of who owns what and when they are doing what with their digital assets. This record cannot be changed or manipulated, because every time a transaction happens, it must be verified by the entire network of computers following the system.
Types of Cryptocurrencies
Cryptocurrencies are classified into two types: utility and security. Utility coins are those that have specific value in the market and there exists a demand for them. For example, Bitcoin is considered a utility coin because its value is based on how much people want to use it. Security coins, on the other hand, take on the role of digital assets as they have no intrinsic value but can be exchanged as an investment asset or used in transactions. For example, Monero is considered a security coin because it’s not accepted as payment like other cryptocurrencies.
The Mechanics of Cryptocurrencies
Cryptocurrencies are a digital currency that operates on the blockchain. The blockchain is a public ledger that records all transactions.
The cryptocurrency market has grown exponentially in the last few years, but this growth has also been accompanied by volatility and wild fluctuations in price. To help investors understand what’s going on with the market, you’ll need to know about cryptocurrencies' mechanics. (Stay tuned for the next article on Cryptocurrencies’ mechanics)
Implementation and Use of Cryptocurrencies
The fundamental analysis of a cryptocurrency is its basic building blocks. Understanding the market and how it functions is what makes you an expert in cryptocurrencies.
Cryptocurrencies come with their own unique features that make them stand out. For example, instant transactions and encrypted data are just two examples of the benefits that cryptocurrency offers over traditional financial systems like Visa or Mastercard. They also offer security benefits as they’re not connected to any central authority like a bank or government.
