Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services. Bitcoin and ether, the second-largest cryptocurrency by market cap, are the most popular cryptocurrencies for retail transactions.
What are Bitcoin and Ethereum?
Bitcoin is a cryptocurrency and a payment system, first proposed by an anonymous person or group of people under the name Satoshi Nakamoto in 2008. Bitcoin is unique in that there are a finite number of them: 21 million.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer.
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where users can buy, sell, or trade cryptocurrencies. Cryptocurrency exchanges can be decentralized or centralized. Decentralized exchanges are hosted on a network of computers and do not require a third party to function. Centralized exchanges are hosted on a single server and require the trust of a third party to operate.
What is a Cryptocurrency Wallet?
A cryptocurrency wallet is a digital or physical device that stores the public and private keys used to send and receive cryptocurrencies. Cryptocurrency wallets can be desktop, mobile, or hardware wallets. Desktop wallets are software wallets that are downloaded and installed on a computer. Mobile wallets are apps that are installed on a mobile device. Hardware wallets are physical devices that store the private key for a cryptocurrency wallet.
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