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You may have heard stories about record-breaking sales for JPEGs worth tens of millions of dollars or celebrities and friends changing their profile pictures to colorful and strange-looking monkey avatars. Worry not, because Bitskwela and Likha are here to help you understand what those images actually are!
In this course, we’ll be exploring the colorful world of NFTs. But before we learn about these digital assets, let's quickly review what cryptocurrency and blockchain are.
To best understand what a cryptocurrency is, let’s break it down into its root words: crypto and currency.
Crypto is derived from the word cryptography, which refers to the practice of techniques for secure communication in the presence of adversaries or bad actors. Simply put, cryptography is the practice of hiding information.
Currency, on the other hand, is a medium of exchange and a money system used most commonly within countries and nations. Examples of these are the Philippine Peso (PHP), United States Dollar (USD), European Dollar (EUR), or Japanese Yen (JPY).
With all of that said, we can now put them together and come up with a simple, singular definition: A cryptocurrency is a type of digital currency secured by cryptography — making it nearly impossible to counterfeit or hack.
Usually, cryptocurrencies are blockchain-based, which makes most of them decentralized.
A blockchain is a digital ledger that stores the transactions happening in the Bitcoin network. A ledger is basically a book or collection of financial data.
You can think of a blockchain as a chain that ties all the transactions together one after the other. A blockchain is immutable, decentralized, distributed, secure, and fully verifiable.
The cool thing about a blockchain is that it can be adapted and used to create countless types of cryptocurrencies - not only Bitcoin. Another type of cryptocurrency is what we call Non-Fungible Tokens or NFTs. If you want to learn more, hop on to the next modules!
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