What are the main cryptocurrencies?
There are over 18,000 cryptocurrencies, but the two main ones are bitcoin and ether. Bitcoin is the oldest crypto (released in 2009) with the largest market capitalization, and is primarily used as a store of value or payment alternative. Ether has the second-largest market capitalization, but it differs from bitcoin in that its original blockchain, Ethereum, is more like an app-building platform than a digital payment system. The ether coin is thus used for a variety of applications, including decentralized finance (DeFi) and non-fungible tokens (NFT).
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What has crypto got to do with Web3, NFTs, and the Metaverse?
Crypto can be understood as the cornerstone of the Web3 economy. It enables censorship-resistant transactions without the need for centralized parties. In Web3, users are meant to experience digital ownership, which means complete control over their data and assets. This is where NFTs come in, because they grant that level of ownership. But to stay in a decentralized ecosystem, decentralized payment methods must be used. This is why crypto is used to trade NFTs and other assets in Web3.
Moreover, since the metaverse is basically the social layer of the Web3, it too needs a financial mechanism for open economic activity, but one that also does not belong to any central authority and indicates an undeniable record of ownership ( blockchain). Hence the metaverse platforms offering their own native coins, like The Sandbox and Decentraland.
What is a crypto exchange?
A crypto exchange is a platform through which buyers and sellers can trade cryptos. While some of the most popular exchanges are centralized, much like a traditional exchange, others are decentralized, which means that no single entity retains control of them. Examples of the former (which account almost entirely for crypto marketing spend), include Coinbase, FTX, Binance, and Crypto.com; examples of the latter include Uniswap and PancakeSwap.
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Is the cryptography secure?
Cryptography security is a hotly debated topic. While the most popular blockchains are extremely successful at operating as programmed (for example, maintaining transaction security), their effectiveness as a financial investment is less reliable. Cryptos are volatile and may not be as scalable as proponents previously thought. In the case of smart contract-based blockchains such as Ethereum, this creates a shaky foundation under applications such as NFTs.