What Is Cryptocurrency?

We have started to hear the term cryptocurrency very often nowadays, and some of you have already started trading cryptocurrency. However, knowing blockchain and cryptocurrency technologies and knowing what the projects of companies with cryptocurrency are good for are the first steps to take before entering the world of cryptocurrency.

Everyone's money is important to them and everyone wants to increase their money, which is why cryptocurrencies are in great demand. One of the most important reasons why they are in demand is that they can be stored safely. Physical currencies have risks of damage and loss, but cryptocurrencies developed, distributed and stored using cryptology technology are considered more secure by many experts. Bitcoin (btc), the first decentralized cryptocurrency developed by someone who is unknown but who calls himself Satoshi Nakamoto, is known as the pioneer of this industry.

The altcoin market has also grown very rapidly and the cryptocurrencies of Ethereum, Ripple, Cardano companies are receiving huge investments. To own a digital asset, an account must be opened on cryptocurrency exchanges. Trading is done on cryptocurrency exchanges.

The Fundamentals of Cryptocurrency

Cryptocurrencies come from cryptography, which is a science of encryption. Cryptocurrencies developed as virtual and digital currencies do not have physical equivalents, cryptology is used to create and exchange cryptocurrencies.

Cryptocurrencies are assets that can be traded, mined, and are subject to interest. Each of the cryptocurrency companies defines a field for themselves in the crypto world and presents their cryptocurrencies to investors as an investment tool. This situation, which is similar to the traditional stock market and stock concepts, is different in the digital world, but is generally aimed at both companies and investors.

There are so many arguments that can be used for the crypto currency definition, we will talk about them later in the article and we will see many cryptocurrency terms and definitions.

Are Cryptocurrencies Legal?

Although cryptocurrencies are not illegal digital assets, they may be prohibited by law by some countries. So whether a cryptocurrency is legal or not depends on the laws of your country of residence. In order to prevent illegal money transfers, many countries have recently started to make regulations regarding cryptocurrencies, so that cryptocurrencies can be used legally and even more securely.

By examining the websites and social media accounts of cryptocurrency companies, it is possible to access the legal information of the companies and information about whether they are reliable or not. There is a whitepaper document on the websites of cryptocurrency companies that work legally and fairly. Legal regulations and all other information are available there.

Are Cryptocurrencies Safe?

Although cryptocurrencies are considered reliable by some, they are considered unreliable by others. It is considered that there is no guarantee because it is decentralized and cannot be monitored. On the other hand, there are those who argue that it is safer than fiat currencies if the necessary regulations are completed.

People can produce fake money using many technologies, but it is not possible to produce fake cryptocurrency. The maximum supply of cryptocurrencies with a certain amount of supply can only be increased or decreased by cryptocurrency companies. Many cryptocurrencies can be earned by mining, which creates the definition of proof of work. Depending on the transaction resolution speed and time, giving cryptocurrencies as a reward is seen as safe and lucrative.

How to Trade Cryptocurrencies

There are numerous cryptocurrency exchanges and exchange platforms for trading cryptocurrencies. Bitcoin or altcoins can be purchased with fiat currencies or stablecoins. If you have just met cryptocurrencies and do not know where to start, the first thing you should do is to understand cryptocurrencies well, learn which cryptocurrency exchanges and clearing platforms are reliable, and then learn to analyze the market.

You need to know the metrics and dynamics in order to make the right decision, as it is better to make all your investment decisions on your own. Afterwards, you can open an account in one of the cryptocurrency exchanges, go to the trade screen after your deposit and buy one of the cryptocurrencies listed on that exchange. Cryptocurrencies with low circulating supply are seen as more risky than others.

Can You Shop with Cryptocurrencies?

Although it was not possible to shop with cryptocurrencies at first, nowadays, with the widespread use of cryptocurrencies, many online shopping platforms offer cryptocurrencies to their customers as a payment method. Although the cryptocurrencies accepted by each platform are different, the most widely used is of course Bitcoin.

In fact, Bitcoin has been accepted as a currency by some countries and can be preferred as a payment method in physical stores and in various places. In addition to popular cryptocurrencies such as Bitcoin, Ethereum, Ripple, Cardano and Doge, many altcoins are expected to be used as payment methods over time.

Cryptocurrencies are also used as a payment method within cryptocurrency companies. For example, a game company provides many trading transactions in the game with its own cryptocurrency. This increases the demand for cryptocurrencies day by day. But there are also countries that do not accept shopping with cryptocurrencies. If you want to shop with cryptocurrency, you should research whether it is possible in your area.

How Many Cryptocurrency Are There?

There are over 15000 cryptocurrencies in the cryptocurrency market and this number is increasing day by day. It is possible to see how many cryptocurrencies there are in total, but it is very difficult to calculate how many cryptocurrencies are in circulation in the market because this requires summing up the total supply amounts of each cryptocurrency.

Since the price of each cryptocurrency is variable, it would not make much sense to make such a calculation. Although it is predicted that many crypto money companies will fail in the future, cryptocurrencies that have been in the market for a while and receive a lot of investment continue to be preferred by investors. New cryptocurrencies are also offered on some platforms and attract the attention of many investors thanks to their low prices.

With the spread of virtual reality, companies serving this technology are also increasing, which causes new cryptocurrencies to enter the market faster.

Basic Cryptocurrency Terms

We have prepared some terms for people who are new to the crypto world or people who have already entered this world but do not fully understand everything, let's examine it.

Coin

Coin is actually a term used for physical money, but it is also used in the cryptocurrency world. The largest coin is known as Bitcoin. Coins have their own blockchain system and should not be confused with tokens. For example, cryptocurrencies such as Bitcoin, Ethereum, Solana and Litecoin are coins.

Altcoin

The word altcoin means alternative coin. By itself, altcoin is not a cryptocurrency, it is a generic name. Bitcoin was created as the first coin, and then many cryptocurrencies began to be created as an alternative to Bitcoin. All cryptocurrencies created after Bitcoin are called altcoins. They are traded on cryptocurrency exchanges just like Bitcoin.

Wallet

In the crypto world, the word wallet is used literally as a wallet. There are wallet types such as Digital wallet, E-wallet, Hot wallet and Cold wallet. When you open an account on cryptocurrency exchanges, you have a wallet where you can store your crypto assets. Likewise, you can safely store your crypto assets in other wallet types. Many digital wallets also have mobile applications and are accessible from mobile devices. Cold wallets, on the other hand, are relatively safer storage methods that can be used like flash memory.

DeFi

One of the topics that you can best understand the relationship between blockchain and cryptocurrency is DeFi. DeFi stands for decentralized finance. In other words, these structures are not like banks, they do not work under any institution or organization, they work on the blockchain. More accessible than the traditional financial system, DeFi provides financial freedom to individuals.

Exchange

We call the act of buying cryptocurrency using money and the platforms where we can make these transactions as exchanges. Cryptocurrency exchanges create a secure environment for trading cryptocurrencies. It may not be possible to find every cryptocurrency on every exchange, you can see which exchange allows trading which cryptocurrency on many platforms.

Fork

A fork is the name given to a blockchain splitting two separate paths. In other words, cryptocurrencies are divided in separate copies in these two separate ways and continue to work as two separate cryptocurrencies. A hard fork is a version renewal and creates permanent changes in the system. The work on a single block is processed more easily in two separate blocks after the fork.

Block & Blockchain

We can view the blockchain as a crypto database. Since it is a cryptological technology, it is impossible to hack. Each link of the blockchain is called a block. All transactions are done in blocks on a blockchain. In blockchains, which minimize the information used in many transactions, transactions are made only with codes.

HODL

HODL is actually a misspelling of the English word Hold. HODL, which has become a frequently used term in the crypto world after being misspelled, is the definition of investors keeping their digital assets for a long time instead of buying and selling them instantly. It is also known as a strategy for those who expect a stable increase instead of instant increases and decreases in the market.

Halving

Halving is an update that closely concerns cryptocurrency miners. With halving, the reward earned for each block from mining is halved. Although it does not seem like a good update for miners, it is known as an update that provides the balance in the market.

Mining

Cryptocurrency mining is one of the main items of this technology. Transactions made on the blockchain need approval, just like they are approved by a government agency. Cryptocurrency miners are rewarded with the cryptocurrency they mined in return for these approvals. Mining requires software and hardware. Mining with powerful graphics cards is widely preferred for fast transactions and efficient earnings. However, it is a known fact that these graphics cards consume a lot of energy because they are constantly running.

Node

For the blockchain network as a whole to be able to continue transactions, there must be nodes. Nodes are points that connect blocks. In the mining section, we talked about the hardware that serves the blockchain, and nodes are also known as devices that are connected to the internet and keep a copy of the transactions.

NFT

NFT stands for Non Fungible Token. NFTs are digital assets that cannot be exchanged. NFTs are digital assets that are separate from each other, and each NFT can only have one owner. NFTs, which attract a lot of attention from collectors, are also seen as digital artworks. Photo, audio, video and many more file types can be sold, purchased or stored as NFT. It is possible to have more detailed information on the subject by visiting NFT marketplaces on the Internet. You can easily find answers to questions such as how to create NFT, how to buy and how to store.

Smart Contract

Smart contract can also be viewed as digital contract. These contracts are processed on the blockchain and eliminate human error as well as enable very fast processing of transactions. Agreements specified by codes cannot be changed, but they can be followed. Rules are determined at the beginning and transactions are made according to those rules.

Stablecoin

Cryptocurrencies equal to one reserve asset are called stablecoins. Stablecoins also work on the blockchain. Instead of using fiat money, you should buy a stablecoin to use an equal cryptocurrency (usdt, usdc, etc.). Stablecoins can be bought with fiat money. The stablecoin price does not change. For example, 1 USDT = 1 USD. However, although 1 USDT equals 1 USD, they cannot be withdrawn directly to bank accounts.

Token

We talked about the terms blockchain and coins. Although the token is confused with the coin, it is different from it. Tokens do not have their own blockchains, cryptocurrencies of projects created on existing blockchains are called tokens.