Crypto Kids: A Beginner's Guide to Cryptocurrency for Children
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Cryptocurrency is a new phenomenon in the world of finance, but its history began quite a long time ago. In 2009, the first and most famous cryptocurrency was created – bitcoin. Its creator, or creators, using the pseudonym Satoshi Nakamoto, developed a new kind of digital currency that did not depend on banks and governments.
Bitcoin was created as a response to the 2008 financial crisis, when banks and governments failed to prevent the collapse of the economy.
Since the creation of Bitcoin in 2009, cryptocurrencies have gradually begun to conquer the world. In the early years of Bitcoin’s existence, it was used mainly for trading on the Internet and among a small community of enthusiasts.
However, over time, interest in cryptocurrencies has increased, and new cryptocurrencies such as Ethereum, Ripple and Litecoin have appeared. Cryptocurrencies began to attract the attention of investors and entrepreneurs who saw in them the potential to create new businesses and to invest in the future.
Today, cryptocurrencies have become more accessible, and they can be purchased on specialized exchanges and platforms.
Some countries have even started using cryptocurrencies as an official means of payment.
However, cryptocurrencies still cause controversy and debate. Some people see them as an opportunity for a revolution in the financial system, while others consider them unstable and risky. Nevertheless, cryptocurrencies continue to develop and attract the attention of people from all over the world.
Chapter 3. How do Cryptocurrencies work?
Cryptocurrencies work using a technology called blockchain. Blockchain is a set of records that is stored on many computers around the world. Each record contains information about which transactions were made with cryptocurrency.
Imagine that you have a box of cubes. Each cube contains information about the transaction. When you want to send a cryptocurrency, you take one of the dice and add new information about the transaction. Then you close the cube and mail it to another person.
When this person receives a cube, he adds it to his box of cubes. All the people who store cryptocurrency have their own boxes with cubes that they can update and check to make sure that all transactions have been executed correctly.
In other words, when you send a cryptocurrency, your transaction is added to a block, which is then added to the chain of other blocks. This chain of blocks is called a blockchain. Each block contains a unique code that helps protect the blockchain from fraud and unauthorized access.
In addition, cryptocurrencies do not have a central governing body, such as a government or a bank. Instead, they work on the basis of a decentralized network, where network participants interact with each other directly, without intermediaries.
This makes cryptocurrencies more independent and secure, as they do not depend on a single management node, which can become the target of cyber-attacks.
Here’s how cryptocurrencies work in short. I hope this helped you understand the basics of cryptocurrency!
Chapter 4. Types of cryptocurrencies
There are many different types of cryptocurrencies. Some of them are the most famous and popular, while others are less common.
Below we will look at some of the most common types of cryptocurrencies:
1. Bitcoin: Bitcoin is the most popular and well-known cryptocurrency. It was established in 2009 and uses blockchain technology to ensure the security and anonymity of transactions.
2. Ethereum: Ethereum is the second most popular cryptocurrency after Bitcoin. It also uses blockchain technology, but has a wider range of applications, including the creation of smart contracts.
3. Litecoin: Litecoin was created in 2011 and also uses blockchain technology. Its transactions are faster than Bitcoin’s and it has lower fees.
4. Bitcoin Cash: Bitcoin Cash was created in 2017 as a result of the division of Bitcoin into two separate cryptocurrencies. It has a larger block size, which allows you to process transactions faster.
5. Ripple: Ripple is designed to ensure fast and reliable transfer of money between countries and banks. It uses its own blockchain technology, but is not decentralized.
6. Tezos: This is a cryptocurrency created in 2018, which is based on the technology of self-managed smart contracts. Tezos also allows coin holders to participate in the management of the network and make decisions about its development.
7. Cardano (Cardano): this is a blockchain platform and cryptocurrency created in 2017. Cardano offers a new approach to scaling the blockchain, which allows you to quickly process large volumes of transactions.
8. James Coin (Jamecoin): James Coin is a new cryptocurrency created in 2022. It uses a unique technology
Many cryptocurrencies are used not only as a means of exchange or storage, but also have other functions. For example, the Ethereum cryptocurrency was created to execute smart contracts. Smart contracts are computer programs that allow two or more parties to make a deal without having to trust each other. The Ripple cryptocurrency, on the other hand, is used for currency exchange and money transfer to other countries.