Thread by @abhishekshah173

The Web 3.0 movement is here to stay.

Doing a deep dive on the basics and more.

Join me as I learn in public 👇

Opened up YouTube and searched for "Cryptocurrency Explained"

Choose the first video that shows up.

With 4M views, @Mrwhosetheboss seems legit

Here is what we will be looking at:

1/ What is crypto?

2/ Why is everyone so bullish on crypto?

3/ The different kinds of cryptocurrency

4/ The dark side

Crypto is 100% digital.

It refers to the transfer of digital assets.

With crypto, there is just a massive ledger that keeps track of all the ongoing transactions.

But what makes it better than the current system?

Decentralization: while all the transactions are recorded on a ledger, everyone on the network has a copy of that ledger.

Think about the bitcoin miners - using their computing power to store copies & getting paid compensation.

But what is the key implication of decentralization?

It enhances validity because the second there is a change on one computer it can be cross-checked with the numbers on the others.

Decentralization prohibits fraudulent behavior and allows open, traceable transactions.

The tech is definitely cool, but I never realized the need for it.

But here's a segment that will definitely benefit:

A group of people who have access to the internet and no access to banks.

With crypto - banks are becoming redundant.

Another, entirely different, aspect of this crypto system is the blockchain.

Blockchain is just a secure type of ledger or another way of organizing all that data.

And how does it do it? Well obviously in the form of blocks that form a chain...

Every time you make a transaction in bitcoin for instance a block is formed with the following data:

1/ the sender
2/ the receiver
3/ the amount
4/ A hash: 123566823409
5/ Prev. hash: 253647192X

The crazy part: if you change just one thing on the block, its has will change...

And the implications are long-lasting.

When the hash on Block B changes, the number for the prev hash on Block C no longer matches up.

So, all the transactions after Block B become invalid.

This is the stuff that makes crypto different.

Now you cannot tamper with just one line of numbers without changing the data on:

1/ all the other millions of blocks out there
2/ all the millions of computers with a copy of the ledger

Definitely like the sounds of that...

As of today, there are more than 6K cryptocurrencies.

Bitcoin is only one of them and each has its differences.

For instance, Ethereum is supposedly faster than Bitcoin.

For more, definitely check out this site:

medium.com/@linda.xie/beg…

While everything so far may have gotten you bullish on crypto, here are some reasons to be careful:

1/ The volatility - a new concept is hard to value and you've definitely seen your friends staring at their screen as @elonmusk performs on SNL

2/ Limited options for usage

3/ Environmental concern - Tesla stopped using Bitcoin for this very reason. A digital asset requires digital power.

But a compelling counter: Crypto may use less energy than traditional banking, a system it is slowly deeming redundant.

4/ No policing may drive criminal activity.

The data, HOWEVER:

With Crypto, only 0.34% of transactions are criminal.
With Cash, it's 5% 🤯

And that makes sense because as mysterious as it sounds crypto (with that public hash we spoke about) is traceable, unlike cash.

Remember: Cryptocurrencies are pseudonymous.

This essentially means that though your public details are not available, your public key or unique identifier is.

With crypto, your actions can be traced back to your public key.

With cash, you can never be sure of the trail.