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47 lines
2.5 KiB
Markdown
47 lines
2.5 KiB
Markdown
---
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summary: 'a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, usually operating independently of a central bank'
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terms: ["cryptocurrency", "cryptocurrencies", "altcoin", "altcoins"]
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---
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{% include disclaimer.html translated="no" translationOutdated="no" %}
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### The Basics
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A digital currency in which encryption techniques are used to regulate the
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generation of units of currency and verify the transfer of funds, usually
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operating independently of a central bank.
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### More Information
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Cryptocurrency is the generic term for a large set of digital assets that
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use encryption techniques to generate units of currency, verify the
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transactions, and transfer value. Generally, cryptocurrencies are considered
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to be decentralized. Cryptocurrency should not be confused with virtual
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currency which is a type of digital money that is usually controlled by its
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creators or developers. Some examples of virtual currency are gametime in
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World of Warcraft, ROBUX in Roblox, reward points programs, or Ripple, all
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of which can be exchanged for currency or cash value, but are not considered
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cryptocurrency because they are centalized and controlled/issued by a single
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entity.
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Monero is one of many cryptocurrencies currently available. Other examples
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are Bitcoin, Litecoin, Dogecoin, Dash, Zcash, etc, but nearly all other
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cryptocurrencies lack features that make them a true money (most importantly
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@fungibility which is a requirement for it to be a store-of-value).
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Not all cryptocurrencies operate the same, but they usually share the
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properties of decentralization, encryption, and the ability to send and
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receive transactions. Most are irreversible, pseudonymous, global, and
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permissionless. Most aim to be a store-of-value or be digital cash that
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allows you to transact.
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Most cryptocurrencies (including Monero) use a distributed ledger (called a
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@blockchain) to keep track of previous transactions. The blockchain serves
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to tell other users on the network that transactions have happened. There
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are many different ways for cryptocurrencies to create their blockchain, and
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not all are the same. Monero uses proof-of-work to craft blocks, where other
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cryptocurrencies may use proof-of-stake or other consolidated methods.
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Ultimately, cryptocurrency is an attempt to create trustless value; that is
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free from borders, governments, and banks. Whether that be to transact or to
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be digital gold is up to the users of each.
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