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Everything you need toknow about

Bitcoin andCryptocurrencies

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Cryptocurrencies are having a moment. They always seem to bounce back exactly when someone writes them off. This is especially true of bitcoin—the king of cryptocurrencies—which came into existence in 2011. From being the new bloke in the financial sector to becoming larger in trading worth than some of the biggest MNCs, bitcoin, and buoyed by its success, other cryptocurrencies are the talk of the town. Yet, many people still don’t understand crypto. They are not minted like cash. They are not physical like say, a gold bar. But they exist, albeit digitally. In this exhaustive guide, Moneycontrol will cover how do cryptocurrencies work, what is the technology behind it and who are the major players. It is an essential guide to everything you need to know about crypto.

Everything you need toknow about

Bitcoin andCryptocurrency

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Cryptocurrencies are having a moment. They always seem to bounce back exactly when someone writes them off. This is especially true of bitcoin—the king of cryptocurrencies—which came into existence in 2011. From being the new bloke in the financial sector to becoming larger in trading worth than some of the biggest MNCs, bitcoin, and buoyed by its success, other cryptocurrencies are the talk of the town. Yet, many people still don’t understand crypto. They are not minted like cash. They are not physical like say, a gold bar. But they exist, albeit digitally. In this exhaustive guide, Moneycontrol will cover how do cryptocurrencies work, what is the technology behind it and who are the major players. It is an essential guide to everything you need to know about crypto.

The

Crypto Universe

Comparing Six Major Currencies
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  • Players
    The Major Players
    Cryptocurrency Bitcoin
    2009
    Bitcoin
    xrpcoin
    2013
    XRP
    dogecoin
    2013
    Dogecoin
    tether
    2014
    Tether
    ethereum
    2015
    Ethereum
    cardano
    2017
    Cardano
  • Value
    % of the Crypto Universe Value
    • Bitcoin
    • Ethereum
    • Tether
    • Cardano
    • Dogecoin
    • XRP
    chart2021chart2019cryptocurrency chart
  • Metrics
    Metrics By Coin
    • A1
    • Market Capitalisation
      (Coindesk report as
      of May 25)
      *All Values are In $
    • Daily Volume
      (30 Day Moving Average) (Coinmarket cap report as
      of May 25)
      *All Values are In $
    • All-Time High
      (30 Day Moving Average) (Coindesk report as
      of May 25)
      *All Values are In $
    • Bitcoin
    • 716.7B
    • 66.7B
    • 64,829.1
    • Ethereum
    • 298.6B
    • 48.3B
    • 4,382.7
    • tether
    • 62.2B
    • 156.3B
    • 1.32
    • cardano
    • 48.9B
    • 6.8B
    • 2.47
    • dogecoin
    • 44.8B
    • 14.1B
    • 0.74
    • XRP
    • 97B
    • 11.09B
    • 3.4

Bitcoin

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Cryptocurrency Bitcoin

Bitcoin is the original cryptocurrency and was released as open-source software in 2009

Using a new distributed ledger known as blockchain, Bitcoin protocol allows users to make peer-to-peer transactions using digital currency while avoiding the ‘double spending’ problem

No central authority or server verifies transactions, and instead the legitimacy of a payment is determined by the decentralised network itself

Key Features
  • Blockchain KeyfeatureBlockchain Foundational technology
  • Crypto Key FeatureFast P2P Technology
  • Dollar SignNo Double Spending
  • Down arrowLow Processing Fees
  • Cornar arrowDecentralised
  • Circle arrowAvailable to Anyone
  • leave signAnonymity (Partial)
  • Slanting lineTransparent
Interesting Facts
pizza1arrowCryptocurrency Bitcoin10,000

In 2010, a programmer bought two pizzas for 10,000 BTC in the first real-world bitcoin transaction

Today that would be worth over $36 million. Now that’s one expensive bite!

Now cryptocurrency enthusiasts around the globe celebrate Bitcoin Pizza Day on May 22, the day the transaction took place

The smallest unit of Bitcoin is called a Satoshi, after the infamous creator

Bottom Line

It is the original cryptocurrency and is also the most recognised of all cryptocurrencies. Naturally, it is also the most expensive of them all

XRP

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xrpcoin

XRP is the cryptocurrency that is used to facilitate transactions on the Ripple network

Key Features
  • keyf_imgGlobal Settlement Network
  • keyf_imgWorks with any store of value
  • keyf_imgBacked by many banking institutions
  • keyf_imgNo mining Involved
Interesting Facts
pizza

Intended as a global settlement system for the exchange of currencies and other assets. Many banks such as Royal Bank of Canada, Santander, UBS and UniCredit are experimenting with the technology

There is no mining of XRP on the Ripple network. The total supply is 100 billion, but not all of it is in the market. The company releases XRP into the market periodically, the rest being held in escrow accounts. This is to mitigate fears of the market being flooded with XRP, thereby diluting the value of tokens already existing in circulation

Bottom Line

XRP can be used like any other digital currency to either make transactions or as a form of potential investment. It reduces transaction costs and is much faster

Dogecoin

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dogecoin

Dogecoin was started as a joke back in 2013 but has risen in value exponentially in the last 2 years. Its main proponent has been Elon Musk and the value of the cryptocurrency has gone hand-in-hand with statements from Musk

Key Features
  • keyf_imgUnlimited cap on supply
  • keyf_imgIt was created as a joke
  • keyf_imgDoes not have a well-funded ecosystem
Interesting Facts
dog2_img dog1_imgdog2_img

It was created as a joke based on the 2013 ‘Doge’ meme

The picture on the Dogecoin is that of a Shiba Inu dog

It hosts one of the largest communities in the crypto space

Bottom Line

Unlike Bitcoin, Dogecoin does not have a sound base and is extremely volatile. It lacks technical development and isn’t as secure as bitcoin

Tether

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Tether

Tether is a blockchain-based cryptocurrency whose cryptocoins in circulation are backed by an equivalent amount of fiat currencies like the dollar, euro or the yen and is held in a designated bank

Key Features
  • keyf_imgStablecoin
  • keyf_imgShares value with US$
  • keyf_imgTrades as USDT
Interesting Facts
tdolorarrowTether

Although Tether is supposed to be backed by an equivalent amount of dollar, this has not been the case as the issuance of the USDT got into the billions. The backing also includes loans to affiliate companies

Tether serves as a dollar replacement on many popular exchanges

Has been accused of allegedly driving up the price of bitcoin on the Bitfinex exchange account

Bottom Line

It is the first and most known stablecoin. It is one of the most dominant cryptocurrencies in use as it gives investors additional flexibility since it can serve as a replacement for the dollar on many popular exchanges.

Ethereum

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ethereum

Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralised applications

In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn ether, the crypto token than fuels the network. Beyond a tradeable cryptocurrency, ether is also used by application developers to pay for transaction fees and services on the Ethereum network

Key Features
  • keyf_imgPlatform for making Blockchain Applications
  • keyf_imgMultiple Industry Uses
  • keyf_imgUses Smart Contracts
  • keyf_imgEther Powers the Network
Interesting Facts
Ethereum 2ethereum1sign

Ethereum has quickly skyrocketed in value since its introduction in 2015, and is now the second most valuable cryptocurrency in terms of market cap

Its value has increased by over 1000% in the last one year

While there is no cap on the total amount of Ethereum, only 18 million can be mined per year

Bottom Line

Since its creation, Ethereum has displaced all but Bitcoin in value and marketshare. Many tech giants like Microsoft, HSBC and Barclays have all found uses for Ethereum in their systems

Cardano

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cardano

It is a proof-of-stake blockchain platform that distinguishes itself from other blockchain platforms through a commitment to peer-reviewed scientific research as building blocks for updates to its platform

Key Features
  • keyf_imgSmart contracts platform
  • keyf_imgEthereum alternative
  • keyf_imgOuroboros create blocks
Interesting Facts
ADA Lovelace

Ada is Cardano’s digital currency, and is named after Ada Lovelace, a 19th century countess and English mathematician, recognised as the first computer programmer

Bottom Line

It is meant to be an alternative to Ethereum. Cardano considers itself as an updated version of Ethereum and has anointed itself a third-generation platform over Ethereum’s second-generation credentials

How BitcoinTransactions Work

Crypto how to work black liner wifi_network black liner
A wants to send B a bitcoin
how to work Bitcoin black liner wifi_network black liner
How to work cryptocurrency 	black liner long wifi network 	black liner long
A sends a TRANSACTION request to the Bitcoin blockchain, a distributed database running on thousands of computers globally
d black liner wifi network
Computers known as MINERS verify this transaction (eg check A’s balance) and compete to place it into a BLOCK with other transactionsblack liner
how to work icon black liner wifi network
Once the answer is VERIFIED (when a majority of miners in the network approve the block), the miner who solved the puzzle gets paid in bitcoinblack liner
g black liner long wifi network black liner long
Others in the network check the miner’s work
f black liner long wifi network black liner long
All this computational power PROTECTS THE BLOCKCHAIN against hackers. It would be difficult and expensive to falsify transactions or attack the network
how to work currency black liner long wifi network black liner long
To append a block to the chain of prior blocks, miners solve a MATH PUZZLE that requires a lot of computational power to solve
Crypto bit black liner long wifi network black liner long
A’s transaction gets ADDED TO THE BLOCKCHAIN along with others
Work Bitcoin black liner long wifi network black liner long
B receives the bitcoin
Crypto work Icon black liner wifi network black liner
A wants to send B a bitcoin
how to work Bitcoin black liner wifi network black liner
d black liner wifi network black liner
Computers known as MINERS verify this transaction (eg check A’s balance) and compete to place it into a BLOCK with other transactionsblack liner
How to work cryptocurrency black liner wifi network black liner
A sends a TRANSACTION request to the Bitcoin blockchain, a distributed database running on thousands of computers globally
how to work currency black liner wifi network black liner
To append a block to the chain of prior blocks, miners solve a MATH PUZZLE that requires a lot of computational power to solve
f black liner wifi network black liner
All this computational power PROTECTS THE BLOCKCHAIN against hackers. It would be difficult and expensive to falsify transactions or attack the networkblack liner
how to work icon black liner wifi network black liner
Once the answer is VERIFIED (when a majority of miners in the network approve the block), the miner who solved the puzzle gets paid in bitcoinblack liner
g black liner wifi network black liner
Others in the network check the miner’s work
How to work Crypto black liner wifi network black liner
A’s transaction gets ADDED TO THE BLOCKCHAIN along with others
Work Bitcoin black liner wifi network black liner
B receives the bitcoin

Crypto Podcasts

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business|China lays down challenge to the West on crypto

30 July|ND 11:48

Governments and private sector must adopt more unified approach in response to Beijing

business, podcast|Hot Stocks: Bharat Dynamics, Bharti Airtel, Havells top buys for next 3-4 weeks, here’s why

30 July|ND 07:01

The key support level to watch out for from a short-term perspective is 15,500 and on the upside,16,000 will act as a strong resistance, said Karan Pai of GEPL CAPITAL

business|Crypto startup Vauld raises money from Peter Thiel fund, others

29 July|ND 06:36

Crypto startup Vauld raised funds from a Peter Thiel co-founded firm, with the vision of becoming a bank for the crypto industry.

business, podcast|D-Street Talk: This PMS fund manager managing Rs 1150 cr see FII money moving to India post China crackdown but not immediately

29 July|ND 05:27

Highlighting the impact of data privacy, Narayan said that if the services are free that you are the product. Effectively, it is true for so-called internet new-age disruptors or the app-economy.

business, interview, india, podcast, coronavirus|Future Wise | Is 100% back to office the right strategy?

28 July|ND 05:07

In this episode of Future Wise, Moneycontrol's M Saraswathy talks to Sunil Goel, MD, GlobalHunt to find out the challenges. Listen in for more.

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