OLI TRADING ACADEMY

CRYPTOCURRENCY TRAINING
WHAT IS CRYPTOCURRENCY?
Cryptocurrency is typically decentralized digital
money designed to be used over the internet.
Bitcoin, which launched in 2008, was the first
cryptocurrency, and it remains by far the
biggest, most influential, and best-known. In the
decade since, Bitcoin and other
cryptocurrencies like Ethereum have grown as
digital alternatives to money issued by
governments.
CONT’D
• The most popular cryptocurrencies, by market
capitalization, are Bitcoin, Ethereum, Tether and
Solana. Other well-known cryptocurrencies include
Tezos, EOS, and ZCash. Some are similar to Bitcoin.
Others are based on different technologies, or have
new features that allow them to do more than
transfer value.
• Crypto makes it possible to transfer value online
without the need for a middleman like a bank or
payment processor, allowing value to transfer
globally, near-instantly, 24/7, for low fees.
CONT’D

• Cryptocurrencies are usually not issued or controlled by

any government or other central authority. They’re
managed by peer-to-peer networks of computers running
free, open-source software. Generally, anyone who wants
to participate is able to.
• If a bank or government isn’t involved, how is crypto
secure? It’s secure because all transactions are vetted by
a technology called a blockchain.
BRIEF HISTORY OF CRYPTOCURRENCY
• Modern cryptocurrencies are decentralized systems
based on blockchain technology. The blockchain is a
distributed database structure first described by a
cryptographer named David Chaum in his 1982
doctoral dissertation.
• Before Bitcoin
Before the creation of Bitcoin, there were quite a few
examples of online digital currencies, but none
succeeded in attracting much interest or establishing
themselves in financial markets. Two examples of such
currencies are B-Money and Bit Gold.
 2008: Satoshi Nakamoto and Bitcoin
• The internet domain bitcoin.org was registered in
August 2008. It remains the homepage of the world’s
most widely used cryptocurrency. On October 31 of
the same year, a person or organization using the
name Satoshi Nakamoto published a scientific paper
titled Bitcoin: A Peer-to-Peer Electronic Cash System.
This paper is known in the crypto world as “Satoshi’s
whitepaper.”
• The paper presented the concept of cryptographically
secured blockchain technology. Bitcoin was
described as a theoretical open-source digital
resource. “Open source” meant that no one owned
it and that everyone could participate in its use and
development.

• To this day, no one knows who Satoshi Nakamoto

is. His identity is subject to lots of myths and theories.
It is possible that his identity will always remain
unknown.
 2009: Bitcoin Mining Begins
• In early 2009 the Bitcoin software became
available to the public for the first time. Satoshi
Nakamoto mined the first 50 Bitcoins, thus
launching the practice of crypto mining. It was a
time when only a small team of programmers
and enthusiasts participated in the development
of what few of them anticipated would one day
be viewed as a groundbreaking technology.
 BLOCKCHAIN TECHNOLOGY
• A cryptocurrency blockchain is similar to a bank’s balance
sheet or ledger. Each currency has its own blockchain,
which is an ongoing, constantly re-verified record of every
single transaction ever made using that currency.
• Unlike a bank’s ledger, a crypto blockchain is distributed
across participants of the digital currency’s entire network
• No company, country, or third party is in control of it; and
anyone can participate. A blockchain is a breakthrough
technology only recently made possible through decades
of computer science and mathematical innovations.
CONT’D

• The principles behind both bitcoin and the Bitcoin

blockchain first appeared online in a white-paper
published in late 2007 by a person or group going by the
name Satoshi Nakamoto.
• The blockchain ledger is split across all the computers on
the network, which are constantly verifying that the
blockchain is accurate.This means there is no central
vault, entity, or database that can be hacked, stolen, or
manipulated.
 KEY CONCEPTS ABOUT CRYPTOCURRENCY
• Trasferability
• Privacy
• Security
• Portability
• Transparency
• Irreversibility
• Safety
Transferability

Crypto makes transactions with people on the

other side of the planet as seamless as
paying with cash at your local grocery store.
Privacy
When paying with cryptocurrency, you don’t need to provide
unnecessary personal information to the merchant. Which
means your financial information is protected from being
shared with third parties like banks, payment services,
advertisers, and credit-rating agencies. And because no
sensitive information needs to be sent over the internet,
there is very little risk of your financial information being
compromised, or your identity being stolen.
Security

Almost all cryptocurrencies, including

Bitcoin, Ethereum, Tezos, and Bitcoin Cash
are secured using technology called a
blockchain, which is constantly checked
and verified by a huge amount of
computing power.
Portability

Because your cryptocurrency holdings aren’t

tied to a financial institution or government, they
are available to you no matter where you are in
the world or what happens to any of the global
finance system’s major intermediaries.
Transparency

Every transaction on the Bitcoin, Ethereum,

Tezos, and Bitcoin Cash networks is published
publicly, without exception. This means there’s
no room for manipulation of transactions,
changing the money supply, or adjusting the
rules mid-game.
Irreversibility

Unlike a credit card payment, cryptocurrency

payments can’t be reversed. For merchants,
this hugely reduces the likelihood of being
defrauded. For customers, it has the potential to
make commerce cheaper by eliminating one of
the major arguments credit card companies
make for their high processing fees.
Safety

The network powering Bitcoin has never been

hacked. And the fundamental ideas behind
cryptocurrencies help make them safe: the
systems are permissionless and the core
software is open-source, meaning countless
computer scientists and cryptographers have
been able to examine all aspects of the
networks and their security.
 CRYPTOCURRECY MINING
Most cryptocurrencies are ‘mined’ via a decentralized (also
known as peer-to-peer) network of computers. But mining
doesn’t just generate more bitcoin or Ethereum - it’s also the
mechanism that updates and secures the network by constantly
verifying the public blockchain ledger and adding new
transactions.
Technically, anyone with a computer and an internet connection
can become a miner. But before you get excited, it’s worth
noting that mining is not always profitable. Depending on which
cryptocurrency you’re mining, how fast your computer is, and
the cost of electricity in your area, you may end up spending
more on mining than you earn back in cryptocurrency.
CONT’D

As a result, most crypto mining these days is done by

companies that specialize in it, or by large groups of
individuals who all contribute their computing power.
How does the network encourage miners to participate in
maintaining the blockchain? Again, taking Bitcoin as an
example, the network holds a lottery in which all the mining
rigs around the world race to become the first to solve a
math problem, which also verifies and updates the
blockchain with new transactions. Each winner is awarded
new bitcoin, which can then make its way into the broader
marketplace.
CRYPTO MINING MACHINE
Different Types of Cryptocurrencies

Since Bitcoin’s debut more than a decade ago, many new

types of cryptocurrency have emerged. From stablecoins to
non-fungible tokens (NFTs) to dog memes, a wide variety of
cryptos are available today. What they share in common is
the use of the distributed ledger technology known as the
blockchain.
How Many Cryptocurrencies Are There?

• CoinMarketCap reports that there are approximately

22,932 cryptocurrencies, with a total market
capitalization of $1.1 trillion. That’s quite a crowd
considering that Bitcoin only launched in 2009.
• The first alternatives to the original crypto—later termed
altcoins—didn’t appear on the scene until 2011, with the
likes of Litecoin (LTC) and Namecoin (NMC). It wasn’t
until Ethereum (ETH) launched that altcoins gained
popularity.
CONT’D

• Some cryptos, like Bitcoin, are used as investment

vehicles. Many buyers consider them to be a store of
value. Others are more transactional, like ETH.
Developers can build all sorts of transactional tools,
services and communities using the more transactional
blockchains.
• Cryptoassets are highly volatile. Your capital is at risk.
TYPES AND CATEGORIES OF CRYPROCURRENCY

• COINS
• ALTCOINS
• TOKENS
• STABLE COINS
• MEME COINS