What is cryptocurrency?
There are 1001 different iterations out there for Cryptocurrency. But all of them can agree that cryptocurrency is a digital currency that works as a medium of exchange that is both decentralized and encrypted by Cryptography. The value of cryptocurrency is largely derived from the supply and demand of the market.
What is blockchain?
Blockchain is widely considered to be the greatest innovation of the 21st century. It is a revolutionary technology that has many real world use cases – such as cross-border payments and music royalties tracking. So this begs the question, what is blockchain?
Think of blockchain technology as a special kind of database – one that records an incorruptible record of all transactions that happen through it. Almost like a super secure, trackable, and visible excel spreadsheet!
The idea behind blockchain technology is wrapped around the three main pillars which are Decentralization, Transparency, and Immutability.
- Decentralisation: The blockchain technology does not require a centralized entity to function. On the other hand, the traditional financial system relies heavily on a centralized entity such as central banks.
- Transparency: As everything is recorded on the blockchain, all the transactions can be publicly viewed by anyone and everyone. While the transactions can be viewed publicly, users can still retain anonymity as the user’s identity is not revealed and only the wallet address is published. More on wallets in Lesson 3.
- Immutability: Blockchain is known to be very secure as it is immutable. It means that data can only be added to the blockchain over time and information that is already on the blockchain cannot be deleted or changed in any way.
Met with big words that you might not be familiar with? Luno Discover has a dedicated glossary page to help you out with these definitions. Refer to it as you go through this course so you don’t get lost – let’s move ahead with Lesson 2!
This educational course is created in collaboration with Luno Discover – your beginner-friendly cryptocurrency education portal. For more bite-sized learning and webinar invitations, join Luno’s Telegram Channel.