What Is Blockchain Technology? A Step-by-Step Beginners Guide

What Is Blockchain Technology? A Step-by-Step Beginners Guide

Cryptocurrency is also known as digital currency is now becoming a real asset like that of the estate such as land, shares. The term is coined after the unknown person in 2009 with the pseudo-name, Satoshi Nakamoto. Most of the companies started the trade as a bitcoin exchange. Cryptocurrency is composed of two words crypto and currency, which means the currency secured by cryptography. No middle man is required in between the transaction. Bitcoin can book hotels, shop furniture, and Xbox games.

Bitcoins are like stocks that are brought at a low rate and sold at a higher value. Security is a major concern, while the entire process is very complex. In the year 2016, the site was hacked and millions of dollars were stolen. Sending can be done in two ways:

  • Transfers: Bitcoin transfer is very simple as it did not require complex devices. We can do the transfer using mobile phones or computers.
  • Mining: Mining is solving complex mathematical puzzles. For solving each block of the blockchain, they reward a bitcoin. Mining is a complex process and requires computational equipment to solve the block. The hexadecimal value of 16 digits secured the entire process. The guessed solution should be less than the original solution. 

Bitcoin Wallet

This is a virtual bank account stored in the cloud or user’s computer. Sending and receiving of bitcoin is done through this virtual bank account with no additional amount. They record each transaction in a public log. Wallet ids are displayed, the user’s name is not displayed. The user transactions being private help to prevent them from tracking. Cryptocurrency has been in light because of its controversy over money laundering and hacking incidents.

In March 2014, bitcoin stated all virtual currency will be considered as property and taxed. Bitcoin being as the king and the key influencer of the crypto market. They make exchanges on the platform of Coinbase, Bitstamp, Binance, Bitfinex, and many others. With the explosive growth in cryptocurrency, we have introduced API to make reliable transactions. Let us look at some APIs:

  • Binance: This is one of the largest cryptocurrency platforms by the large volume of trades and users. The application requires a third-party application to execute the trades. Changpeng Zhao found this in the Cayman Islands in July 2017. The registration process requires a name and email address similar to the other applications. Two-factor authentication secures the process. Third-party apps are used for trade by accepting and canceling the orders. HTTP Basic model and single-purpose API supporting JSON response and request formats platform.
  • Coinbase: Brian Armstrong and Fred Ehrsam found Company in June 2012, United States. Coinbase platform allows developers and businesses to integrate different payment modes such as Bitcoin, Litecoin into the businesses or applications. We use an API key along with the two-factor authentication. The developers are looking for an opportunity to connect with them.   
  • Bitfinex: Founded in December 2012 operated by iFinex Inc with its headquarters in the British Virgin Islands and is based in Hong Kong. Bitfinex serves as a platform for cryptography exchanges offering services to users around the world. The cryptocurrency used in this is the tether. Tether is also called a stable coin as designed of a value equivalent to US $1.00. Third-party applications are allowed by traders and make trades on their behalf.
  • Bitstamp: Based in Luxembourg, is used to exchange cryptocurrency for Ether, Litecoin, and many more. They accept Fiat money deposits for transferring money between European Bank accounts. Bitstamp allows third-party applications for transactions and accessing user accounts. The developers are also looking forward to the Bitstamp.

As it comes to exchange platforms, there are many platforms available, but while choosing, you had to consider some factors:

Security: While making any financial transactions the security and privacy are a must. Most of the exchange platforms have a KYC process for the user’s identification. Regulation authority often recommends the investor learn about the exchange process before purchasing.

Volume: We often compare different exchanges before any trade to check their reliability. The more the number of transactions, the more is reliability. Here, the transaction value of $1B in 24 hours for a smooth process. We defined experts by the amount handled every day. 

The Number of coins: There are different digital coins other than bitcoin, which are altcoins. These are also called alternate coins, such as Ripple, Litecoin. Depending on the type of coin and the quantity you want to purchase. Sometimes there are currency limits, so depending on the deposit options and currency, the platform is advised.

Commission: Different platforms have different trading rates. Most of the platforms offer lower commission rates, such as 0.1%,0.2%.

Verification: The most important factor in choosing security and privacy. Some platforms need documents to verify their identity. Sometimes the passport’s first page is required for verification and is done within seconds. The verification process at least takes a week or days, depending on the platform.

The cryptocurrency exchange or financial exchange is a very complicated process. Each platform has a set of rules associated with it. To learn about the basics, you can refer article, What is Cryptocurrency & Bitcoin? A Beginner’s Guide to Digital Currency!

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