Learn Cryptocurrency with CFI

Cryptocurrency is a digital currency that works as a currency of exchange through a computer network that isn’t centralized, like a government or bank. It uses cryptography to secure transactions on a decentralized ledger that can be viewed by any participant. Cryptocurrency can be exchanged in a trustless environment between two unknown parties. It can also be traded on cryptocurrency markets, which are exchanges that allow customers to trade cryptocurrencies for other assets, such as digital currencies or fiat money.

A Non-Fungible Token (NFT) is a type of digital asset that uses the same blockchain technology that underpins cryptocurrencies, although it is not a cryptocurrency itself. The “non-fungible” part of the NFT name means that whatever digital asset is contained in the Token is unique and cannot be substituted by something similar. Hence, the owner of the NFT not only is able to prove ownership of the digital asset, but also can prove the authenticity of that digital asset. You can imagine an NFT to be an unchangeable electronic certificate of authenticity for a unique asset.
So far, we have seen NFTs used for collectibles, such as digital art, but since NFTs are digital representations of assets, they can be used in the future for any scarce or unique asset.

While a physical wallet that we keep in our pocket or purse may contain paper money or coins, when it comes to cryptocurrencies, the currency is actually never held by the owner but rather remains on the blockchain and can never leave the blockchain to go anywhere else. However, your proof of ownership of that digital currency is held on a digital wallet.

Each digital wallet will also have a public identifier that will appear when you transact using a cryptocurrency. No visible records of who did what transaction with who, only the identifier of a digital wallet. So, cryptocurrencies are not truly anonymous, but rather pseudonymous.

Digital wallets can be mobile, web-based, desktop, computer-based, stored on a secure physical device, or even physically-stored.

Cryptocurrency and decentralized finance are new and gaining ground. As adoption becomes widespread, the industry will need finance professionals with an in-depth understanding of cryptocurrencies and the decentralized digital value exchange.