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What ıs CRYPTO ?
Crypto (short for cryptocurrency)
is a digital or virtual means of payment that uses cryptographic methods to secure transactions and is usually based on decentralized blockchain technology, which makes it work independently of banks and governments, transfers money directly from person to person (peer-to-peer) and prevents counterfeiting, with well-known examples being Bitcoin and Ethereum.
Key features of crypto:
Decentralization: There is no central control body like a central bank.
Cryptography: Strong encryption secures transactions and the creation of new units.
Blockchain: A public, immutable digital database in which all transactions are stored transparently and forgery-proof.
Virtual: Cryptocurrencies exist only digitally and not as physical coins or banknotes.
Peer-to-peer: Transactions are made directly between users.
How it works:
Transaction: One person sends cryptocurrency to another.
Encryption & Signature: The transaction is secured with cryptographic methods and digitally signed by the sender.
Blockchain: The transaction is combined in a new “block” together with others and attached to the existing chain.
Decentralized validation: Many computers on the network check and confirm the transaction before it is permanently stored in the blockchain.
Examples:
Bitcoin (BTC): The first and most famous cryptocurrency.
Ethereum (ETH): Another large cryptocurrency that also provides a platform for other applications (DApps).
Areas of application:
As an investment (speculation).
As a means of payment for goods and services.
As part of a diversified investment portfolio.
Important note: Cryptocurrencies can be subject to extreme fluctuations in value (volatility) and therefore carry high risks.
WHAT IS A CRYTO WALLET?
A crypto wallet is a digital tool (software or hardware) that uses your private keys for cryptocurrencies such as Bitcoin stores and allows you to securely receive, send and manage your digital assets on the blockchain, similar to a digital wallet, whereby the coins themselves remain on the blockchain, but you access them via the keys. It acts as an interface to different blockchains and enables transactions, distinguishing between "hot wallets" (online, e.g. apps) and "cold wallets" (offline, e.g. hardware devices) that offer different security levels.
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