4.2 Understanding the Different Types of Cryptocurrency - Video Tutorials & Practice Problems

So now, I wanna talk about the different types of cryptocurrency, because we've talked about Bitcoin, but Bitcoin is only one type of cryptocurrency. And as I mentioned, it was the first decentralized cryptocurrency, but there are many others. So as we get into this understanding of different types of cryptocurrency, there are some key elements I wanna point out to you. So let's take Bitcoin for a moment. We stated that a Bitcoin enables you to do a transfer of an asset of value peer to peer. So the transfer is conducted securely and directly over the internet between two parties without the need of a centralized third party. As a result, we said that this transfer is disintermediated 'cause you don't have an intermediary partner, sorry, yes, there's no third parties that actually have to be in the middle of this. It's decentralized because there's no centralized entity overseeing this transfer that could put a stop payment or could change the transaction, so that's gone. And we stated also that it's trustless. This is what a peer to peer transfer on Bitcoin looks like. And what enables you to do that is Blockchain. And we stated that these Bitcoin nodes all over the world have a copy of the Bitcoin blockchain. So when you put it all together, Bitcoin enables a peer to peer transfer directly without needing a third party to do so. And you do that by using a blockchain, which keeps a permanent and immutable record of all the transactions. So once we've said that, we can also look at a Litecoin. So in the case of Litecoin, it's a very similar approach. It's also a cryptocurrency which does peer to peer transfer directly over the internet without needing a third party. And it does that by keeping a blockchain. And this is a different blockchain. So just like the Bitcoin blockchain keeps a record of all the transactions that are in the Bitcoin network. The Litecoin has its own blockchain. And that blockchain keeps a record of all the Litecoin transactions, and Litecoin has a network of nodes that are actually running Litecoin. So furthermore, you have Bitcoin Cash. Bitcoin Cash is another type of cryptocurrency and in the very similar fashion, it also has a blockchain of its own and there's a network of nodes which are actually running Bitcoin Cash. And in the case of Bitcoin Cash, they're doing transfers directly peer to peer over the internet without needing the services of a third party. And in the case of Bitcoin Cash, you also have a Bitcoin Cash blockchain, which keeps a permanent and immutable record of all the transactions. All of these are cryptocurrencies, which actually have very similar functionality to what Bitcoin does. Now, we're going to explore further what the universe of cryptocurrencies are, because these are just a few of the cryptocurrencies that are available.