Cryptocurrencies

Cryptocurrencies #

‘Crypto’ is more than just a digital financial system. At its core, it is a technological and economic revolution that has given rise to a new way of exchanging value and information. With blockchain as a foundation, we have seen the emergence of various applications in areas as diverse as banking, real estate, video games, art and historical memory.

Sectors #

As coins are only part of everything that can be done within a blockchain network, another series of niches are presented in different layers of the development of crypto projects. Some of the most relevant sectors:

Technology: Development of platforms, networks, computing, integrations with other systems, programming environments, dApps, utilities to intertwine APIs, software, etc.

Finance and Banking – DeFi: Blockchain is used to improve security, transparency and efficiency in financial transactions, international payments, securities settlement and asset management. Applications in decentralized finance, staking, yielding, onchain trading, creation and exchange of tokens within different markets, investment systems, savings, liquidity farming, etc. .

Video games and GameFi: Blockchain implemented in the development of video games, crypto integrated into interactive platforms, games with tangible economies, entertainment and crypto.

Culture, art and Memes: Intelectual property, cultural objects, art, tokenization of ideas, events, characters, memes, extreme currencies, ponzis.

RWA: Real World Assets, the tokenization of any object in the real world. Projects that integrate crypto with things from the physical world, such as products, royalty derivatives, goods, etc.

AI: Fusion of artificial intelligence, mining hardware networks powered by AI, deep learning, chatbots with blockchain and vice versa: blockchain in the service of neural networks, computing systems, robo ;ethics, etc.

Dark Side: Scams, money laundering, clandestine businesses, etc. As with money in its most primitive state or in the banking system itself or any network of people: not all of them will have good intentions, but that is not our business.

Main Cryptocurrencies #

Blockchains are then networks where things are done and things are connected. There are games, music platforms, security systems, clan systems destinations, art galleries, metaverses or databases. It is very vast, so it is recommended to think of crypto as a complex of networks full of data, programs and services. Currencies are creations within those worlds and are the usual medium for exchanging value, but they are only a small part.

A cryptocurrency is a digital asset or object programmed within a specific blockchain. It is normally created under certain programming, distribution, utility, etc. parameters. There are millions of cryptocurrencies and anyone can create one, in different types of blockchains, and as they are capitalized, they grow within the general market.

Bitcoin – BTC #

Bitcoin is a decentralized network based on P2P exchange. Its cryptocurrency is BTC and is obtained through a method called proof-of-work in which high computing resources (and therefore energy) are used to solve computational puzzles. complexes that are “undermining” the blocks of the cryptocurrency, in turn divided into a kind of particles called satoshis. There is a limited amount of Bitcoin that can be mined, a scarcity that adds value.

Bitcoin was thought up by an anonymous entity calling itself Satoshi Nakamoto, but it is unknown if it is someone, a group of people or extraterrestrial intelligence. In any case, Bitcoin and its whitepaper are the flag of the decentralization of finance: money managed publicly and anonymously, where each user has custody of their coins. Still, large nations have BTC, many holding companies, banks, etc. Bitcoin is an asset of complex and trillion-dollar value, being the most important also gives it control to determine the general trend of the crypto market: Bitcoin prints market sentiment.

Bitcoin can be acquired through wallets that connect specifically to the Bitcoin network, or from practically all the Exchanges that exist. In other networks, such as Ethereum, it is not possible to buy Bitcoin because it is not a currency that inhabits other networks as such. In any of the main exchange houses it is possible to acquire BTC in any denomination, receiving cash satoshis, or Bitcoin cents.

Ethereum – ETH #

Ethereum It is a blockchain designed as a global computer, that is: a platform to develop code, decentralized applications, create tokens and build all kinds of algorithmic complexes. In the Ethereum network, where the main currency is ETH, everything works based on a type of program known as smart contracts, which are algorithms that fulfill certain functions: being a dApp ( decentralized app), a token such as a currency or a digital object), a data exchange system, among other things.

The Ethereum network is the most used for the development of apps and other networks. Its ETH coin is the second most important after BTC, both in price and market capitalization. However, the importance of Ethereum lies in the utility it provides for the entire crypto ecosystem, given that it was designed to be used as a decentralized computing megamachine, with ETH being the gasoline that moves the network, generating an exchange of value between it.

Although it began with high environmental cost for mining like BTC, over time Ethereum has become lighter thanks to the proof-of-stake method, in which users freeze their assets to provide liquidity to the network, therefore being with less environmental impact, leaving it with the challenges of high commissions, the limits of scalability, speed, among other things that L2 tries to solve. However, the use it provides, the immense number of programs it houses and its importance within blockchain culture, make Ethereum essential.

Altcoins #

One of the main innovations of the Ethereum network was being able to create currencies within the network itself, triggering the phenomenon of so-called altcoins, that is, currencies created on a blockchain, in this case Ethereum. Smart contracts are developed using different protocols that have allowed the creation of things such as a cryptocurrency within the network or digital objects such as NFTs. This model has been replicated by other blockchains born as L2 within the network.

d Ethereum and within which more coins can be created. For example: within Ethereum there is the Base network, with which other currencies of that network can be created.

There are millions of cryptocurrencies, as many as ideas, as there are publications on the internet. A cryptocurrency is something relatively simple to create, since anyone with sufficient knowledge of smart contract programming or using tools that facilitate the process, can create a currency and launch it on the market. In basic terms, someone creates X amount of a coin called AAA and generates a liquidity pool where people can deposit the network currency (ETH for example) in exchange for the AAA coin. That pool fills with ETH as people take A, which rises in price as there is more demand for it. Then those who have AAA begin to sell it, weakening its price but enabling the purchase of people who will be interested in those “discounts.” Some currencies gain value or utility and then are not sold as easily or are bought with greater intensity, a dynamic of supply and demand that results in sometimes exacerbated growth and falls. So The cycle flows with each currency: bubbles that inflate and deflate at different times.

On-chain currencies #

Several of the projects that initially created their coins in ETH became networks themselves. themselves, separating themselves from Ethereum. Others like Solana were born separately to replicate the Ethereum model and try to surpass it. In general, it is a model similar to that of Ethereum and ETH: One network + One currency of that network, designed as comprehensive development platforms, markets, services, etc.

In this way, SOL, currency of the Solana network, can be found as a currency on the Ethereum network, but it can also be transferred to the Solana network as such, where there are other currencies created within that network, such as case of BONK, for example. BONK is a currency created on the Solana network, which transcended It is part of your network and can also be purchased outside the network itself. Therefore, the coins themselves They do not depend on a network, but are created on different networks and may or may not be found on various blockchains.

Specific networks are usually accessed from wallets that connect to them. Each one has commissions in the currency that corresponds to it, and within each one you can find its own internal currencies, apps, services, etc. These coins can then appear in other liquidity pools, such as those of major exchanges, where they end up gaining volume and capitalization or simply being forgotten forever.

Stablecoins or stable cryptos #

Not all cryptocurrencies are volatile, there are also the so-called stablecoins, which are equivalent to currencies like the Dollar and play a crucial role as a safe haven in times high market volatility. The best known include USDT and USDC, frequently used in cryptocurrency trading pairs. In essence, 1 USDT or USDC is equivalent to 1 USD. When trading, these stablecoins (or the network’s native cryptocurrency) are normally purchased to acquire other cryptocurrencies. However, the usefulness of a specific stablecoin may vary depending on the platform being used. using.