HOW A BLOCKCHAIN WORKS?
WHO ARE THE PLAYERS INVOLVED?
The cryptocurrency market is a yet not fully explored one. There are different participants who play different roles.
To have a close look on how market works, let’s explore what each market player does.
Cryptocurrency users is the main player. He might be an individual or a legal entity who obtains coins to purchase real or virtual goods or services, to make P2P payments, or to hold them for investment purposes.
Miners participate in making the transactions valid by solving a ‘cryptographic puzzle’. A miner supports the network by using computing power to validate transactions and is rewarded with newly mined coins.
Cryptocurrency exchanges work same as forex exchanges, they might be a person or an entity who offer exchange services, most of the time there are fees included. This way, cryptocurrency holders can convert them in fiat currencies and vise-versa.
Trading platforms play an important role in the exchange of cryptocurrencies. Trading platforms are marketplaces that bring together different cryptocurrency users that are either looking to buy or sell coins, providing them with a platform on which they can directly trade with each other.
Wallet providers are those entities that provide e-wallets for crypto users. E- wallets are used to hold, store and transfer digital coins among the crypto users. Say it simple, a wallet keeps safe the cryptographic of a cryptocurrency user. So, it translates the transaction history into a readable format, which looks like a regular bank statement.
Coin inventors might be people or entities who have developed the infrastructure of a cryptocurrency and set the initial rules for its use. Sometimes their identity is known, and in other cases it remains unidentified.
Coin Offerors are people or companies that offer coins to crypto users at no charge or payment, just to make it popular and boost its initial popularity.
Most popular Cryptocurrencies
1) The poster child for the cryptocurrency industry;
2) A virtual, decentralized and anonymous currency;
3) Runs on an open, permissionless blockchain;
4) Directly convertible into fiat currency.
1) A decentralized platform that runs so-called “smart contracts”;
2) It has a capability that goes far beyond that of a pure P2P digital cash;
3) It is like a smartphone operating system on
top of which software applications can be built.
1) It was launched in 2012 by the private company Ripple;
2) According to Ripple, XRP can handle more than 1,500 transactions per second;
3) It is being accepted as a means of payment by a growing number of (online) merchants for various goods and services: e-cigarettes, honey, coffee.
1) Derives from Bitcoin;
2) It is decentralized P2P digital cash;
3) Anyone who held Bitcoin at the time Bitcoin Cash was created
(August 2017) also became owner of the same amount of Bitcoin Cash.
1) It is often described as the ‘silver’ to Bitcoin’s gold;
2) It offers a much faster transaction speed than Bitcoin;
3) The total supply limit of Litecoin is with 84 million coins, much higher than the 21 million supply limit of Bitcoin.
1) It is an open-source, distributed payments infrastructure;
2) Its goal is to connect people to low-cost financial services to fight poverty and develop individual potential;
3) Stellar is home to the cryptocurrency Lumen.
1) It is home to the open source decentralized cryptocurrency Ada;
2) It is (one of the first) blockchain projects to be developed and designed from a scientific philosophy by a team of leading academics and engineers;
3) It is based in Switzerland, which aims to standardize, protect and promote the Cardano technology and eco-system.
1) It is focused on private and censorship-resistant transactions;
2) It allows its users to execute transactions in full anonymity;
3) This high standard of anonymity is achieved using two different techniques: Ring Confidential Transactions and Stealth addresses.