Investors are hopeful that the price of Bitcoin could reach an all-time high in 2024, bringing cryptocurrencies back into the spotlight. However, terms like blockchains, wallets, and spot ETFs can be confusing for many. To clarify, here are some key definitions:
Bitcoin: The most famous cryptocurrency, Bitcoin is a digital currency not controlled by central financial institutions, making it volatile in value.
Blockchain: The technology behind cryptocurrencies, blockchain is a virtual spreadsheet where all transactions are recorded in blocks linked together.
Exchange-traded funds (ETFs): Portfolios that allow investors to bet on multiple assets without buying them directly, traded on stock exchanges like shares.
Crypto Exchange: A digital platform where investors can buy, sell, and trade cryptocurrencies using traditional money.
Crypto Wallet: A place where investors store their cryptocurrencies, with hot wallets connected to the internet for quick access and cold wallets offline for security.
Ethereum: The second largest cryptocurrency after Bitcoin, Ethereum supports various applications and digital assets on a more energy-efficient blockchain system.
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