“The cryptocurrency market, with its volatile price and decentralized structure, poses challenges even to financial professionals. It is necessary not only to have a good understanding of these technologies, but also to be able to navigate in a rapidly changing environment. However, the world of cryptocurrencies is not as complicated as it may appear at first glance,” says Christian Lenkas, head of the cryptocurrency company Wickie.
In his opinion, it is best to learn about the world of digital currencies in a step-by-step way before you are introduced to it – first of all, you should find out what cryptocurrencies are in general and review their main categories.
Cryptocurrencies
Cryptocurrency is a digital currency based on blockchain technology. These are decentralized digital currencies whose main goal is to ensure a safe, fast and independent transaction system without central banks or government intervention.
Bitcoin (BTC), Ether (ETH), Build and Build (BNB) or Solana (SOL) are probably the best known and largest cryptocurrencies by market capitalization.
Cryptocurrencies are available through crypto wallets or exchanges. People commonly say that cryptocurrencies are “held” in wallets. However, cryptocurrencies do not actually exist in crypto wallets or exchanges – in fact, they always remain on the blockchain.
The first and best-known cryptocurrency is bitcoin, which was launched in 2009. created by a person or group using the pseudonym Satoshi Nakamoto. Since then, thousands of cryptocurrencies have emerged, each with unique characteristics and goals.
Like traditional currencies, cryptocurrencies can be used as a medium of exchange. However, over the years, the spectrum of uses for cryptocurrencies has expanded significantly.
Stablecoins
The market value of many well-known cryptocurrencies, such as bitcoin or ether, fluctuates significantly. Meanwhile, the value of stable cryptocurrencies (stablecoins) is linked to traditional stable assets, such as major currencies and raw materials.
The US dollar pegged Tether (USDT), USD Coin (USDC), as well as the euro-backed Eurite (EURI) are gaining popularity.
Stablecoins are designed to avoid the volatility common to this market, and for every unit of stablecoin issued, a corresponding value is held as collateral that can be redeemed.
The algorithm manages the supply of issued stablecoins by increasing or decreasing them according to certain criteria, thereby maintaining their association with stable assets.
Stablecoins are used for trading, payments, transfers and are suitable for crypto market newcomers who are afraid of them due to excessive risk.
Utility Tokens
Goods and service tokens, also called utility tokens, are cryptocurrencies that give users the right to use certain services or products on a certain blockchain platform. Utility tokens are designed to perform specific functions, and their value often depends on the popularity of the platform on which they are used.
For example, the cryptocurrency Ether, which is assigned to tokens for goods and services, is used to transact on the Ethereum network or use smart contracts.
According to the website Binance Academy, they give users access to various services or functions, acting as a kind of digital key that allows you to unlock the features of a particular blockchain project.
These tokens are often used during initial cryptocurrency offerings (ICOs) or IEOs (initial exchange offerings) – when tokens are distributed through the mediation of cryptocurrency exchanges.
Non-fungible token (NFT, Non-fungible Tokens)
It is a cryptographic token that represents a unique asset. NFTs (non-fungible tokens) are tokenized versions of digital or real assets such as works of art. They act as verifiable proofs of authenticity and ownership on the blockchain network.
The most important feature of NFTs is that they are not interchangeable. NFTs cannot be directly exchanged for another token of this type (unlike, for example, traditional cryptocurrencies). This means that each NFT is unique and valuable because of its individuality.
NFTs enable the creation and management of unique digital items and collectibles. Although NFTs can be traded on open markets that connect buyers with sellers, each one has a unique value.
Meme Coins
Meme coins are cryptocurrencies that originate from internet memes or popular cultural phenomena. One of the most famous meme cryptocurrencies is Dogecoin or Shiba Inu.
Their value is highly speculative and their popularity can rise or fall quickly depending on social media fads or celebrity influence. Another typical feature of meme cryptocurrencies is their massive or unlimited supply. For example, Shiba Inu has a supply of 1 quadrillion tokens, while Dogecoin has no maximum supply at all. Nevertheless, meme cryptocurrencies are also an important part of the cryptocurrency market.
The popularity of these cryptocurrencies, especially Dogecoin, has been heavily contributed by Tesla founder Elon Musk. The entrepreneur has been posting memes about Dogecoin on social network X, calling it “the people’s cryptocurrency”. This has attracted a younger audience that is less interested in traditional finance.
The program initiated by the association “Crypto Economy Organization” (CEO) is intended to increase the public’s financial literacy, educate them about new digital technologies and their application, dangers in the digital space and ways to protect themselves from them.
Cryptocurrency market companies Fideum, Binance, Coinpayments, Lemma-X, Wickie, operating in Lithuania, participate in the project.
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#Types #digital #assets #caught #variety #cryptocurrencies #Business
**Interview with Christian Lenkas, Head of Wickie Cryptocurrency Company**
*Date: October 23, 2023*
**Editor:** Thank you for joining us today, Christian. The cryptocurrency landscape can be daunting, especially for newcomers. In your experience, what are the key things one should understand before diving into this world?
**Christian Lenkas:** Thank you for having me. I believe the first step is to understand what cryptocurrencies are in general. A lot of people think that they’re overly complex, but at their core, cryptocurrencies are digital currencies based on blockchain technology, designed for safe and independent transactions without needing central bank oversight.
**Editor:** That sounds like a good starting point. You mentioned categories of cryptocurrencies. Could you elaborate on some of the main types?
**Christian Lenkas:** Absolutely. We generally categorize cryptocurrencies into a few types: stablecoins, utility tokens, non-fungible tokens (NFTs), and meme coins. Stablecoins, for instance, are tied to stable assets like the US dollar to avoid market volatility. Utility tokens allow users to access certain services on specific platforms—take Ether used on the Ethereum network, for example. NFTs represent unique assets and provide proof of ownership, while meme coins like Dogecoin draw their value from social media trends and cultural phenomena.
**Editor:** With so many categories, where should someone start if they’re interested in investing in cryptocurrencies?
**Christian Lenkas:** A step-by-step approach works best. Begin by familiarizing yourself with the basics of blockchain and cryptocurrency. Look into the major currencies, like Bitcoin and Ether, then explore stablecoins if you’re concerned about volatility. It’s essential to keep learning and to stay updated with market trends, as the landscape changes rapidly.
**Editor:** Do you think cryptocurrencies are safe investments?
**Christian Lenkas:** The digital currency market is inherently volatile, and while there’s potential for high returns, there’s also significant risk. It’s crucial to conduct comprehensive research and consider your financial situation before investing. For newcomers, starting with stablecoins or smaller investments can mitigate some of that risk.
**Editor:** how do you see the future of cryptocurrencies evolving?
**Christian Lenkas:** I believe we’re just scratching the surface. As technology evolves, we will likely see more innovations in this field, such as the integration of cryptocurrencies into everyday transactions and the development of new token types. Education will play a vital role in facilitating this transition, helping the market become more accessible to everyone.
**Editor:** Thank you, Christian. Your insights on navigating the cryptocurrency world have been invaluable.
**Christian Lenkas:** Thank you for having me! It was a pleasure to discuss this exciting industry.
