What is a Cryptocurrency?

Cryptocurrencies, often referred to as Crypto, are digital or virtual currencies that operate using decentralized networks, ensuring secure financial transactions. Through EPB’s trading platform, individuals can engage in trading Crypto Contracts for Difference (CFDs), including popular options like Bitcoin and Ethereum. This trading method involves speculating on the price fluctuations of these cryptocurrencies without directly owning them.

What are the Benefits of Crypto CFDs?

• * No need to have an exchange account or use a special wallet!
• * Trade in any direction - Selling is just as accessible as Buying
• * Available 7 days a week, 24 hours a day!1

Blockchain Technology and Associated Crypto Terms

• * Before we elaborate on the main types of cryptocurrencies, we should first explain the term ‘blockchain’. Blockchain is a special type of software technology that most cryptocurrencies are built on.
• * Blockchain uses a peer-to-peer network of computer nodes to verify cryptocurrency transactions and ownership. This verification process uses cryptography for security. Cryptography involves the use of complex mathematical formulas and is what gives cryptocurrencies their name.
• * Nodes are every computer in a network that runs a particular software. Some specialist nodes are tasked with solving cryptographic problems, which are used to secure cryptocurrency transactions. They are awarded newly minted cryptocurrency units for their trouble. Because they put in work to eke out new cryptocurrency units, the term used to refer to these specialist nodes as ‘miners’.

Different Kinds of Cryptocurrencies – Coins and Tokens

One of the fundamental concepts to understand in the realm of cryptocurrencies is the distinction between 'coins' and 'tokens', sometimes also referred to as 'utility tokens'. Cryptocurrency coins are digital currencies intended for buying and selling goods and services, serving as alternatives to traditional fiat currencies like the dollar, pound, euro, or yen. Examples of 'coin' cryptocurrencies include Bitcoin, the pioneering cryptocurrency, as well as others like Bitcoin Cash and Litecoin. Bitcoin Cash, for instance, emerged from a 'hard fork' in the Bitcoin blockchain, where a segment of the network sought to implement technical changes for improved efficiency, resulting in the creation of a new cryptocurrency—Bitcoin Cash. A hard fork occurs when a cryptocurrency's blockchain undergoes an update, leading to the formation of a new, independent cryptocurrency. This term is contrasted with 'soft fork', where the blockchain remains compatible with the original protocol. Another term frequently encountered is 'Altcoins', which encompasses all cryptocurrencies besides Bitcoin, originating with the proliferation of various cryptocurrencies following Bitcoin's introduction. In contrast, cryptocurrency tokens are not primarily intended for direct spending like traditional currencies. Instead, they are associated with specific blockchains designed for particular functions, such as smart contracts on platforms like Ethereum or payment solutions like Ripple. Tokens are utilized within these blockchain ecosystems for various purposes, such as accessing decentralized applications (Dapps) or facilitating transactions. Smart contracts represent programmable sets of rules that execute automatically when specific conditions are met. These contracts, integral to blockchain technology, underpin decentralized applications, or Dapps, which operate without centralized control. While this overview doesn't encompass all specialized cryptocurrency terminology, it provides a brief introduction to many of the terms encountered in the field.