“Satoshi is somewhere between the Benjamin Franklin and Banksy of Bitcoin”
Grasping the concept of cryptocurrency isn’t complex. Let’s dive in. Bitcoin, emerging in 2008, was the first application of blockchain technology. Fast forward over a decade, and we have thousands of cryptocurrencies in the market. The most prominent ones, Bitcoin and Ethereum, currently constitute about 60% of the entire crypto ecosystem, boasting a combined market cap of 1.1 trillion USD.
You may wonder, what about the source of their value? It’s influenced by several factors:
- Scarcity: Just like precious metals, most cryptocurrencies have a limited supply.
- Utility: The network effect plays a crucial role — the more a cryptocurrency is used and accepted, the more valuable it becomes.
- Practical use cases: This includes applications like smart contracts.
- Investor sentiment and adoption levels also significantly impact value.
The remaining 40% of the crypto ecosystem comprises stablecoins like USDT and USDC, pegged to fiat currencies such as the US Dollar, and a variety of other coins. Note: Many of these other coins are speculative or less credible (‘💩shitcoins💩’), so thorough research is essential before trading!
Now, cryptocurrency serves multiple pivotal roles in the Web3 ecosystem:
- ✅ You can do peer-to-peer transactions without the need for intermediaries like banks.
- ✅ You can own voting rights, which can be used to influence the direction and policies of a project or platform.
- ✅ You can stake your crypto assets to support the operation of blockchain networks, often earning rewards in return.
- ✅ You can, as creators or developers to monetize your work directly, whether through NFT sales, decentralized finance (DeFi) platforms, or other means.
The ‘Buts’ of cryptocurrency (there’s always a but).
- ❌ You can’t expect the same level of stability as most fiat currencies, which can be a challenge for everyday transactions and long-term contracts.
- ❌ You can’t mechandise globally YET, which it is not universally accepted as a form of payment (Many businesses and countries are still hesitant or outright refuse to accept them).
- ❌ You can’t be guaranteed privacy in all cases. Many blockchains are transparent, and transactions can be traced, which could potentially lead to privacy concerns.
🎉 Congratulations! Now that you have a clearer understanding of cryptocurrencies and their role in the Web3 ecosystem. What’s next?
This news is republished from another source. You can check the original article here
