Learn These 5 Things First..!! 👇🏻
1. Money vs Currency:
- Money refers to a medium of exchange, a unit of account, and a store of value. It's a broader concept that includes both physical currency and non-physical forms like digital money.
- Currency, on the other hand, specifically refers to the physical or digital tokens used as a medium of exchange. It's a subset of money.
2. Centralized vs Decentralized:
- Centralized systems have a central authority or intermediary that controls and regulates transactions. Examples include traditional banking systems.
- Decentralized systems operate without a central authority, relying instead on consensus mechanisms among participants. Cryptocurrencies like Bitcoin operate on decentralized networks.
3. Fiat Currency vs Backed by Asset:
- Fiat currency is a type of currency declared by a government to be legal tender but is not backed by a physical commodity. Its value derives from the trust people place in the issuing government.
- Backed currencies are tied to a physical asset such as gold or silver. Historically, currencies were often backed by precious metals, but this practice is less common today.
4. Digital Vs Physical Currency:
- Physical currency refers to tangible forms of money, such as coins and banknotes, that can be touched and exchanged in person.
- Digital currency exists only in electronic form and is typically transacted electronically. Cryptocurrencies like Bitcoin are examples of digital currency.
5. Blockchain:
- Blockchain is a decentralized, distributed ledger technology that records transactions across multiple computers in a way that ensures the integrity and security of the data. Each block in the chain contains a cryptographic hash of the previous block, timestamped transaction data, and other relevant information. It's the underlying technology behind cryptocurrencies, providing transparency and security in transactions. Thanks to @MS_ CryptoX
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