The cryptocurrencies have been the new future of the money. It has become the new global phenomenon. Given the importance that the cryptocurrencies have been gaining over the years, we thought of a few basic things that you should be aware of. So, with that perspective, here is what everyone interested in cryptocurrency should know.
What is Cryptocurrency?
Cryptocurrency is all about a decentralised peer to peer network for spending your digital cash. In fact, defining it can be a difficult task as such. The exact definition can be on the following lines – it is the list of limited entries in a database that no one will be able to change unless certain conditions are met.
Looks strange? Well, this is how we will be able to define any currency – not only cryptocurrency for that matter. For all the practical purposes, you can you can consider it as a virtual or digital currency that can be used as a medium of exchange, just the way you would use the traditional currencies.
What is an ICO?
If you are checking out the options of investing in cryptocurrency, you may have come across a reference to the term ICO. What exactly is ICO?
ICO refers to Initial Coin Offering. It is identical to the IPO in the case of stocks and shares of a company. It is essentially a fundraising technique. It is ideally used by the newer cryptocurrency projects. They accept Bitcoin and Ether coins in exchange for their cryptocurrencies. The ICOs have become the new standards and have become quite common in terms of the Blockchain technology.
What are Airdrops?
Airdrop is yet another term that has been quite common in recent times after the launch of cryptocurrency. What exactly does that mean?
Airdrops refer to the distribution of cryptocurrencies free of charge to the wallets of some users. It is one of the options that help the blockchain start-ups to bootstrap their projects. Even the established cryptocurrency projects too are involved in the airdrops at times.
There are several reasons the companies engage in Airdrops. A few reasons are a reward for the loyal customers, for generating the lead database and create awareness about the database. You can get to know about the upcoming airdrops through a few dedicated services.
What are Bounties
In the traditional world, a Bounty refers to the searching for the treasure most likely as a pirate or a thief. The Bounties in the cryptocurrency world also means almost the same.
Yes, you are expected to solve a few problems and puzzles given by the cryptocurrencies. These may include jobs, tasks and projects. You will be rewarded once you complete the task and the reward would be in the form of cryptocurrency that has offered the bounty.
The major purpose is to delegate the tasks related to cryptocurrency development. There are few things that developers have no time to and they delegate the task and reward the task with the crypto in return. You may find more about the bounties in forums related to it.
What is mining?
Mining can be a confusing word in terms of cryptocurrencies. It is not essentially about creating new coins. It is indeed a technique to decentralise the cryptocurrency. The miners receive the new coin in the form of reward.
The task that miners need to do is validate the transactions on the Blockchain and register them on the global ledger. You need to solve a complicated mathematical problem and arrive at the solution which is called proof of work. As a miner, you can either receive the reward in the form of a crypto coin or the transaction fees.
Those were the five major terms that are quite essential to understanding the concept of cryptocurrency. We assume the explanation here would have been quite helpful in making you understand the underlying concepts.