Cryptocurrency Basics

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Questions and Answers

What is the best-known cryptocurrency?

  • Ethereum
  • Ripple
  • Bitcoin (correct)
  • Litecoin

What is the primary purpose of cryptography in cryptocurrencies?

  • To secure transactions (correct)
  • To control the creation of new units
  • To enable decentralized exchanges
  • To enable the purchase of goods and services

What is the best way to learn about a cryptocurrency?

  • Reading the project's website
  • Researching the team's background
  • Reading the project's whitepaper (correct)
  • Checking market capitalization

What is the risk of investing in smaller market-cap cryptocurrencies?

<p>They are riskier (D)</p> Signup and view all the answers

What is the main difference between Bitcoin and Ethereum?

<p>Bitcoin is more popular for developing financial applications (A)</p> Signup and view all the answers

What is the primary benefit of using cryptocurrencies?

<p>They are not subject to government control (B)</p> Signup and view all the answers

What is the primary purpose of blockchain technology?

<p>To secure transactions (A)</p> Signup and view all the answers

What is the most important factor to consider when investing in a cryptocurrency?

<p>The project's whitepaper (D)</p> Signup and view all the answers

What is the difference between a digital token and a virtual token?

<p>Digital tokens are digital and virtual tokens are physical (B)</p> Signup and view all the answers

What is the primary advantage of decentralized exchanges?

<p>They are not subject to government control (B)</p> Signup and view all the answers

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Study Notes

  • Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units.
  • Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.
  • Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.
  • Bitcoin is the best-known cryptocurrency and the first and most popular to use blockchain technology.
  • Ethereum is second in market capitalization and is more popular for developing financial applications on its blockchain.
  • Smaller market-cap cryptocurrencies are generally riskier than larger market-cap coins.
  • Investing in a cryptocurrency with a strong team and a clear use case is essential.
  • Reading the project's whitepaper is the best way to learn about a cryptocurrency.

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