Crypto prices and NFTs are hogging the headlines, but they are just the most visible components of a rapidly growing decentralized financial system (DeFi) that has the potential to significantly challenge how we buy, sell, and trade just about everything. Blockchain and cryptocurrency may seem like a new thing, but they have been around for over 10 years. The problem is that the world of crypto can be very confusing with all the jargon, acronyms, and other unfamiliar words. This brief overview will introduce you to some of the basic areas through a series of links to the most prominent organizations, platforms, and toolsets. The full resource page can be found here.
Cryptocurrencies (aka “tokens”) such as ETH or BTC are created (“mined”) when a miner completes a certain amount of computations used to verify transactions that are added to a specific blockchain. (You can learn to mine crypto here.) The miner is rewarded for this effort with a small amount of cryptocurrency. In theory, every ETH or BTC is fungible. Said differently, my 10 BTC or my 50 ETH are worth exactly what your 10 BTC or 50 ETH are worth, and they are interchangeable. There are hundreds of cryptocurrencies that are actively trading on hundreds of exchanges worldwide. Find links to current crypto prices and embeddable price widgets here.
NFTs are created (“minted”) when a unique, standardized token and associated smart contract are recorded on a blockchain. In theory, NFTs are non-fungible. Said differently, the NFT of Nyan Cat (which sold at auction for $510,945) is unique and not interchangeable with other versions of the same file. Find a list of popular sites where you can mint your own NFTs here.
Cryptocurrency exchanges act as an intermediary between a buyer and a seller, making money through commissions. You can buy, sell, or trade your crypto for other crypto or fiat currencies. Not all exchanges offer access to all currencies. Choose your exchange carefully to ensure it meets your risk profile, your regulatory requirements, and your trading style. Find a list of the most popular centralized as well as decentralized exchanges (DEX) here.
Decentralization is the key feature of cryptocurrency and its underlying technology. So it might surprise you to learn that most cryptocurrency transactions go through centralized exchanges. Centralized exchanges generally offer a higher degree of reliability and, more importantly, there is a company that you can hold accountable for the execution of your transactions. Most (not all) centralized exchanges must comply with “know your customer” rules and comply with at least some regulatory requirements.
Decentralized cryptocurrency exchanges (DEX) allow users to execute transactions without an intermediary. They are “decentralized.” This makes DEX transactions attractive to those who wish to keep their trading activity private. Generally speaking, DEX transactions are crypto-to-crypto. Decentralized exchanges do not facilitate transactions between crypto and fiat currencies.
You will need at least one crypto wallet. Do your research. Each wallet has pros and cons, and no single wallet is right for everyone or for every application. There are dozens, if not hundreds, of crypto wallets available. Find a short list of well-established digital wallets here.
If you’re completely new to distributed ledgers, smart contracts, and crypto and want to write some code, there are many wonderful free resources available online. Here’s a list of some excellent smart contract frameworks and other helpful engineering resources.
Dapp and DeFi Assets
DeFi (Decentralized Finance) platforms are the underlying technologies that enable financial services to be offered with no central authority. Dapps (decentralized applications) are the apps that make the blockchain (distributed ledger ecosystem) run. Here’s a list of some organizations, toolsets, and frameworks that offer important component parts to the quickly evolving DeFi ecosystem.
There’s So Much More
Over the next few weeks, I will take a deeper dive into each of these areas. The best way to use this article is to visit the linked resource page and read through the websites and information pages that interest you.
If you have any questions, comments, or just want to chat about distributed ledgers, DeFi, Cryptocurrency, Blockchain, NFTs or related technologies, please feel free to reach out.
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The information provided has been gathered for your convenience; it should not be considered financial advice of any kind. We do not endorse any of the companies listed herein. We have not received any compensation from any of the companies listed herein. There are no affiliate links on this page. All short descriptions of the links on this page have been taken directly from the link’s respective websites or apps. We make no warranties or representations about these claims.
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.