Investing is all the rage and a great way to build wealth, obviously! If one thing is luring people into the world of investments, it’s crypto. Bitcoin sure is the most popular among the majority of the world’s population, but it’s not the only one!
Here’s a quick crypto recap for our novices who might be feeling a little lost in this world! Cryptocurrencies are digital payments used as a medium of exchange and are stored on cryptography. It’s an independent payment system that operates without any interference from banks, financial institutions, and governments. So don’t be fooled by thinking that there’s such a thing as crypto banknotes. They’re digital payments recorded on public ledgers called blockchains.
The Queen B of crypto is Bitcoin as it’s the first cryptocurrency known to man and it was launched in 2009. It operates on a peer-to-peer network without the need for a middleman such as a bank. Bitcoin is known for its high volatility and speculative nature, and it is often used as a store of value and a means of payment.
Ethereum is a bit different. It’s a blockchain platform that allows developers to build decentralized applications (dApps) on top of it. It’s always on top of the fintech game and introduces new concepts and ideas.
Ethereum introduced the concept of smart contracts, the self-executing contracts that automatically take place when certain conditions are met. Ether (ETH) is the
cryptocurrency of choice on the platform and it is used to pay for transaction fees and run dApps. The platform has recently moved from a proof of work (POW) consensus mechanism to a proof of stake (POS).
Not as popular as the last two but still as good! XRP is a cryptocurrency and THE token used by Ripple. The Ripple ledger was established in 2012. Unlike most cryptocurrencies, XRP is pre-mined, with a maximum token supply of 100 billion. That means that a number of coins were created before the cryptocurrency was launched to the public. Ripple's goal is to provide fast and low-cost international money transfers, and it has partnerships with several major banks and financial institutions.