CRYPTO WORLD-Part01 | What are Cryptocurrencies?

Hello guys. I hope you are all doing well. today I’m going to start my new content series about the crypto world. I will explain blockchain to steemit. My goal is to understand to you all "what is steemit" and why are you earning? Why do they pay for you? I'm willing to answer all questions that you have got inside your head. And please note that I’m not a professional teacher. I'm writing my contents as per my knowledge. sometimes there will be errors and wrong ideas about those things. Feel free to tell me about it. Let's grow our knowledge together. And much love for steemians

What are cryptocurrencies? I think you realize the appropriate response is advanced coins that are like fiat cash. Right, Simply understand they are tokens with a worth. We can trade cryptocurrencies in the computerized world like fiat cash. Notwithstanding, basically understanding cryptocurrencies are tokens that have genuine worth. So we can purchase and sell, trade its worth. We can do exchanges through the digital world with these coins.

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How are digital currencies created?

We should discuss fiat cash first. Fiat monetary standards are given by the public authority. That implies the national bank is making fiat cash and conveying it through society. They(government or national bank) have the force of controlling the cash state. In digital currency, that is an entirely unexpected case. In any case, indeed, cryptocurrencies are computerized. so someone needs to make them like fiat cash. For fiat cash, they cost papers, work, and the ability to make money. So in cryptographic money(cryptocurrency), that cycle is digitalized. So we don't have to trust that papers or actual substances will bring forth cash. We can make coins by settling a numerical calculation(algorithm). This is the production cycle of cryptocurrency. It's less expensive than fiat cash. In fiat money, just the public authority can deal with and print cash. Be that as it may, in crypto, everybody can bring in cash. Now, we should investigate how this started in the past. Satoshi Nakamoto brought forth this idea first. I'm not going to uncover the past. Simply composing the idea.

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We should discuss BTC(bitcoin)

Nakamoto invented this process. There is an algorithm of bitcoin. Everyone can solve it and gain bitcoin. That cost time and computer power. But the point is everyone can do this and gain digital coins. In fiat currency, we can not do that. That's the decentralized nature of digital coins. In the crypto world, that process of generating digital coins is called mining. Everyone can mine digital currency by its own method. The way into the support of a cash's worth is its inventory. A cash supply that is too huge could make costs of merchandise spike, bringing about a financial breakdown. A cash supply that is too little can likewise cause financial issues. So in mining, there are some strategies to fix those problems.

How does that have value?

Imagine that you have made 5 spherical stones. Now you want to add value to them. How can you do that?. In our past, we used a barter system to exchange goods. So you need to make it an exchange medium(you need to make it a trade medium). To do that.. you should invest your push to make it possible. So these stones need to be introduced to society as a medium of exchange. With time and utility, the stones will have their value.

Successful cash should likewise meet capabilities related
1. Scarcity
2. Divisibility
3. Utility
4. Transportability
5. Durability
6. Counterfeitability

Individuals will start to trade food sources for that stone. At that point, you have the ability to make that stone disseminate. You can make stones that have value. A similar rule applied to the current digital money projects like bitcoin steem Tron etherium dogecoin and so forth best venture is bitcoin. It's worth such a lot of these days. Computerized coins are dispersed by society through the project's ecosystem. That idea gave birth to the steemit. We should talk about it later.

According to investopedia,

There are a few ideas driving this mining innovation. In the event that you are willing about the mining interaction, here is an extraordinary clarification. In my words, advanced coins are volatile. Some projects are failing while others are growing so quickly. Bitcoin is the best digital money at this moment. A similar idea yet as of now, that strategy has been created. each cryptocurrency project has its own ecosystem to appropriate its token to individuals all throughout the world.

At the point when I'm referring to these things. I had some unacceptable thoughts regarding digital currency. Possibly you have that equivalent thought as well. So it's better to make reference to all of you.

I thought fiat money is the primary currency(yes in current society it's the fundamental cash yet). Also, I figured we could change this cash over to digital money. That is to say, I thought cryptocurrencies and fiat currency have a similar worth. The only difference is digital and non-digital. For instance, I have 10$ in fiat money so I can change over this into 10$ worth of crypto. Just that. Presently I have 10$ computerized cash. Nothing will happen to them later on. assuming I need to purchase something, I can utilize that digital 10$. I was 80% wrong. How about we examine it. As a matter of first importance, comprehend that cryptocurrencies and fiat currencies are entirely two different currencies. Like USD and LKR. We can have both. USD is steady, which means 1$ is consistently 1$ always 1$. I can purchase chocolate. So later on, I can purchase chocolate for 1$. Possibly the item worth will be growing, however, 1$ is consistently similar. It's the steady worth of its own. now imagine you have 1crypto coin (1btc) which implies you have another cash with its own worth. That worth is unstable. 1btc is consistently 1btc. yet contrasted with different currencies, there might be an immense gap between them. For example,1btc is worth more than 30,000USD at this point.. comprehend that a computerized coin isn't equivalent to fiat here and there. Crypto and fiats are totally different two monetary forms.

I hope to share my knowledge with you :)