The Most Common Crypto Questions in 2020 and Answers for You

The Most Common Crypto Questions in 2020 and Answers for You

With the growth of crypto industry some questions of people around the world are emerging. To reconcile their thirst of knowledge we are answering some common question made by people. The topic  questions are as follows:

Regarding Cryptocurrency

Cryptocurrencies is an internet-based medium can be sent directly between two parties via the use of private and public keys. It is a medium of exchange which uses cryptographic functions to conduct financial transactions. Cryptocurrencies is comprised of digital assets that use blockchain technology to gain transparency and decentralization to varying degrees.  The first cryptocurrency ever created is Bitcoin. Digital assets include Bitcoin, other cryptocurrencies, stablecoins etc.

Types of Cryptocurrencies

Other cryptocurrencies except Bitcoin are known as ‘’altcoins’’ include Stellar, Tron, Salt and OmiseGo. Facebook is introducing their Libra, which is tied to the fiat currency of governments bonds and fiat currencies.

Introducing ICO?

The full form of ICO is initial coin offering. It is a type of funding using cryptocurrencies. An ICO is an investment that gives the investor a cryptocoin or token in return for investment. In an ICO, tokens are being offered rather than stocks and the public swaps money for tokens. A quantity of cryptocurrency is sold in the form of tokens or coins to investors in exchange for other cryptocurrencies or legal tender in an ICO.

Securities and Cryptocurrencies

Whether cryptocurrencies will be counted as securities that actually depend on circumstances like under several frameworks and various SEC regulations. A security is a financial instrument having monetary value and can be traded that is issued by government and company that provides ownership rights, debt rights. But possibility is lower in case of Bitcoin as it has no centralized governance and not tied to the success of a company or centralized organization.

Relation between Bitcoin and Blockchain

Bitcoin is a decentralized digital asset and a currency but blockchain is not a currency. Blockchain is a ledger that keeps all records of bitcoin transactions. Private Key works as a safeguard of accessing to account or records of transactions. Bitcoin has proof-of-work consensus and uses specific model of transactions. On the contrary to that Blockchain technology has no strict restrictions on consensus, transaction model and data that will be transferred in it.

Libra or Bitcoin

Libra is expected to have low volatility and is tied to currency such as U.S. dollar or to gold. These features can take Libra peak of all existing cryptocurrencies especially bitcoin but the matter is not like this. But popularity of Facebook can be an issue of thinking. Fact is that Bitcoin will remain the asset of choice for those who want cryptocurrency that’s first-to-market, decentralized and determined by the people but lacking of governance is an issue. Bitcoin and Libra will continue to have different purposes.

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