What are the main cryptocurrencies?
There are over 18,000 cryptocurrencies in existence, but the top two are bitcoin and ether. Bitcoin is the oldest crypto (released in 2009) with the largest market cap, and is mostly used as a store of value or payment alternative. Ether has the second-largest market cap, but it differs from bitcoin in that its home blockchain, Ethereum, is more akin to an app-building platform than a digital cash system. The ether coin is thusly used for a variety of applications, including decentralized finance (DeFi) and non-fungible tokens (NFTs).
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What does crypto have to do with Web3, NFTs and the metaverse?
Crypto can be understood as the essential building block of the Web3 economy. It allows for censorship-resistant transactions without the need for centralized parties. In Web3, users are supposed to experience digital ownership, meaning full control of their data and their assets. This is where NFTs come in, as they grant that level of ownership. But in order to stay within a decentralized ecosystem, decentralized payment methods should be used. This is why crypto is used to trade NFTs and other assets in Web3.
Moreover, since the metaverse is basically the social layer of Web3, it too needs a financial mechanism for open economic activity, but that also belongs to no central authority and points to an undeniable record of ownership (the blockchain). Hence metaverse platforms offering their own native coins, like The Sandbox and Decentraland.
What is a crypto exchange?
A crypto exchange is a platform through which buyers and sellers can trade crypto. While some of the more popular exchanges are centralized, much like a traditional stock exchange, others are decentralized, meaning no one entity maintains control. Examples of the former (which almost entirely account for crypto marketing spend), include Coinbase, FTX, Binance and Crypto.com; examples of the latter include Uniswap and PancakeSwap.
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Is crypto safe?
The safety of crypto is a hotly contested topic. While the most popular blockchains are extremely successful in working as they’re programmed (e.g. maintaining the security of transactions), their effectiveness as a financial investment is less trusted. Cryptos are volatile and may not be as scalable as proponents previously thought. In the case of smart-contract-based blockchains such as Ethereum, this makes for a shaky foundation beneath applications like NFTs.