You’ve undoubtedly heard about the price of Bitcoin, that mysterious electronic money, and its roller-coaster ride over the past decade.
From zero to tens of thousands of dollars, up and down, it’s tempting to fantasize what it would be like holding a few Bitcoin in your wallet or purse, and even more tempting to want to get it on the ride.
But what exactly is Bitcoin, and crypto? And what about these new NFTs? What exactly are all of these things? How do they work? What should you look out for? In this post, all of this and more will be revealed.
We first need to start off by nailing down the blockchain basics. I know, I know. But trust me, once you understand the basics of blockchain technology, everything else will make a lot more sense. So let’s take a step back and start from the beginning.
Blockchain is a new type of distributed ledger technology, or DLT for short. In basic terms, this means that instead of having one central server that stores all the data, the data is spread out across many different computers.
DeFi is short for decentralized finance. But first, it’s probably easier to think about what centralized finance is. Centralized finance is the current financial system. It’s what we all use now and most of us are already familiar with.
Okay, so we’ve talked about DeFi and blockchain, but what is cryptocurrency? Cryptocurrency is a digital or virtual currency that utilizes blockchain technology. Really, you can think of cryptocurrencies like the digital form of cash and the blockchain like a giant ledger where you publicly write the transactions down for everyone to see.