Basic Concepts of Cryptocurrencies That Everyone Should Understand
🔍 Are terms like blockchain, wallet, or DeFi confusing you?
Don't worry, you're not alone. Here’s a mini crash course to get you started in the crypto world:
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1️⃣ BLOCKCHAIN: The Digital Ledger
It is a decentralized database that records transactions in blocks, without intermediary banks.
Example: Bitcoin and Ethereum are blockchains, but they have different functions.
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2️⃣ WALLETS: Your Digital Wallet
They do not store your cryptocurrencies but your private keys (essentially, the key to move your funds).
Types: Hot wallets (connected to the internet) vs. Cold wallets (offline; more secure).
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3️⃣ TOKENS ≠ COINS
Native cryptocurrencies: like Bitcoin (BTC) and Ether (ETH) → They have their own blockchain.
Tokens: They are created on existing blockchains (example: USDT on Ethereum).
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4️⃣ DEFI: The Future of Finance
Loans, swaps, and interest without intermediaries, using smart contracts (e.g., Aave, Uniswap).
It is the heart of decentralized finance (DeFi).
