Cryptocurrency is an unregulated financial system that is heavily influenced by mathematical models. While bank transactions involve depositing or withdrawing regulated amounts of currency such as dollars or euros, backed by governments with real assets, digital money is unregulated.
That means consumers need to do more research on their investments. Consumers will not have physical coins or bills, but transactions are recorded electronically.
To help understand this decentralized network of money exchange, we have used a list of definitions provided by Coinsource, a company that operates Bitcoin ATMs in the US, including Minnesota.
coins: Like US currency, these are digital assets created by independent blockchains, usually cryptocurrency companies. Also called tokens, the most popular is Bitcoin, with other examples being Ethereum or Binance.
Digital assets: Assets are created digitally by setting parameters in terms of scarcity, transferability and exchangeability attributes. This helps establish the market value of your coins.
Blockchain: In its most basic terms, it is an encrypted digital ledger that records your cryptocurrency transactions. It tracks how much of a certain type of currency you have, how you spend it and if your digital assets gain or lose value.
Initial coin offering: ICO in short form, this is a crowdfunding strategy for startups where those who donate tokens for a specified return.
mining: This is the verification process where blocks are added to the blockchain. It is basically a series of computer computing and requires a data center.
Non-fungible tokens (NFT): A token with inherent qualities that cannot be exchanged for another token.
Stablecoins: A cryptocurrency that is pegged to a stable asset such as the US dollar.
pope: Popes are big investors in Bitcoin, or other assets.
