What is cryptocurrency?- Type of cryptocurrency, Part-1!

Cryptocurrency is one of the fastest growing buzzwords in the world today. Today’s blockchain-based cryptocurrency journey started with Satoshi Nakamoto’s Bitcoin in 2009. Although many have tried to popularize cryptocurrencies before, they have all come back to one place; faith The concept of cryptocurrency first started in 1989. There are countless cryptocurrencies out there today, although most of them are useless or don’t solve any problems, like Bitcoin was able to do.

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**What is cryptocurrency?

Cryptocurrency refers to currency created through cryptography. With the help of cryptography, digital currency transactions are managed through a decentralized network without the help of any third party through the blockchain. All the transaction information of this currency is stored in the blockchain due to which it is impossible to change the transaction information. However, it is good to know here that only cryptocurrencies which are decentralized are safe. For example, Bitcoin transaction data cannot be changed by anyone because it is a decentralized network.

On the other hand, if we talk about Ethereum, which currently has the 2nd highest market capitalization position in the world, then you will be surprised to know that some transactions were rolled back through a hard fork in Ethereum in 2016. I will write about this in detail another day. If anyone is interested, please comment. This is a very interesting case. However, if we say what does it’s mean, then it is the currencies that can be traded from person to person with the help of cryptography without the intervention of any third party.

What’s the meaning of cryptocurrency?

Cryptocurrency means hidden currency. This can be called literal meaning. But if we consider what the Bengali meaning of it can be written, then secret currency goes with it? Of course not. You can see why not in our Cryptocurrency meaning in Bengali article. We discussed it in detail there. Anyway, so we can actually use the Bengali meaning of cryptocurrency? Cryptocurrencies, digital currencies or cryptocurrencies? Most people use these 3 meanings. From that point of view, cryptocurrency seems quite acceptable to us. However, in Bengali it is more pleasant to use cryptocurrency as it is without making any sense. Meaning, cryptocurrency means cryptocurrency. Not all foreign words make sense. From that point of view, the term cryptocurrency is very acceptable to us and we think it is what everyone should use.

How many types of cryptocurrency?

The question of how many types of cryptocurrency may seem redundant. But those who are thinking of investing in cryptocurrencies, must know what are the types of cryptocurrencies and what are the uses of any cryptocurrencies. Below we will discuss the different types of cryptocurrencies in detail. Cryptocurrencies are mainly of two types.

  1. Proof of Work
  2. Proof of Stake
**Proof of Work (PoW)

When we do cryptocurrency transactions, a transaction contains a lot of information. Bitcoin is a proof of work cryptocurrency. When we send someone Bitcoin, we get a transaction ID. With this transaction ID, anyone can see with Blockchain Explorer where you sent bitcoins, how many bitcoins you sent, from which input you sent bitcoins or when you sent them. Now you can create a fake transaction by writing a fake code. Or you can use one input twice. Although possible in theory, not possible in practice. Because, all the information of our transaction is verified by miners.

**Proof of Stake (PoS)

On the other hand, Proof of Stake also does the above. Means, whether our transaction is genuine or not, whether someone is trying to do fake transaction etc. Then our transaction is updated in the new block. But here proof of staking is used to find new blocks. Meaning, holding said coins in your wallet. Whoever holds more coins and whose input is older, will get new blocks here. This process is Proof of Stake.

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