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Module 2: How Crypto Works

a month ago
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Lesson 1: Blockchain Made Simple


Imagine the world’s biggest public notebook.


  • Anyone can write in it.
  • Everyone can see what’s written.
  • But once something is written, it cannot be erased or changed.

That’s what a blockchain is:

  • Each “page” of the notebook is a block.
  • Every time people trade crypto, the transaction is written in the next block.
  • Blocks are linked together like a chain → hence the name blockchain.


How transactions are recorded:

  1. Alice wants to send Bob 1 InVastor Coin.
  2. The transaction is announced to the network.
  3. Computers around the world check if Alice really has 1 coin to send.
  4. Once confirmed, the transaction is written in the public notebook (the blockchain).
  5. Bob now owns the coin, and everyone can see the record.


💡 Reflection Question: Why do you think it’s important that no one can erase or change a blockchain record?


Lesson 2: Security & Trust

Traditional money can be faked. Think of counterfeit notes. But with cryptocurrency, faking is almost impossible. Why?

  1. Unique Codes: Every transaction has a digital signature that can’t be copied.
  2. Network Verification: Thousands of computers check each transaction. If one tries to cheat, the others reject it.
  3. Decentralization: No single bank or company is in control. To hack the system, someone would need to hack millions of computers at once—nearly impossible.


Why Bitcoin and InVastor Coin are safe:

  • Both rely on blockchain for transparency.
  • Both use advanced cryptography (mathematics that locks data).
  • InVastor Coin adds faster confirmations and everyday usability, making it secure and practical.

Analogy:


Traditional money = a padlock with one key (easy to steal if you find the key).

Crypto = millions of padlocks with millions of keys spread around the world (nearly impossible to break).


💡 Mini Exercise: If someone gave you a $100 bill and a $100 worth of Bitcoin, which one could be counterfeited more easily?


Lesson 3: Wallets Explained


If crypto is digital, where do you keep it? You need a wallet—but not the leather kind!


A crypto wallet is like a digital keychain. It doesn’t “hold” coins the way a pocket holds cash—it holds the keys (passwords) that let you access your coins on the blockchain.


Types of wallets:


1.Hot Wallets (online):

  • Examples: mobile apps, exchange accounts.
  • Always connected to the internet → convenient but slightly riskier.
  • Good for daily spending.


2.Cold Wallets (offline):


  • Examples: hardware devices (like USB sticks), paper wallets.
  • Not connected to the internet → very secure, harder to hack.
  • Good for saving long-term.


Storing Bitcoin & InVastor Coin safely:

  • For quick use → hot wallet (like a mobile app).
  • For large amounts → cold wallet (hardware device or offline storage).


Analogy:

  • Hot wallet = your everyday wallet or purse. Easy to access, but don’t keep your life savings in it.
  • Cold wallet = a safe in your house. Less convenient, but much safer.

💡 Reflection Question: Which wallet would you choose if you were holding $10 for daily use vs. $10,000 for long-term savings?


Lesson 4: Sending and Receiving Crypto


Let’s see how a transaction works step by step.


Sending Bitcoin:

  1. Alice opens her Bitcoin wallet.
  2. She enters Bob’s public address (like his bank account number).
  3. She enters the amount and clicks “send.”
  4. The transaction is sent to the Bitcoin network.
  5. Miners confirm it, and after a few minutes, Bob receives the Bitcoin.


Sending InVastor Coin:

  1. Alice opens her InVastor Coin wallet.
  2. She enters Bob’s address and clicks “send.”
  3. The network confirms it almost instantly.
  4. Bob receives the InVastor Coin in seconds, ready to use.


Key Difference:

  • Bitcoin is powerful but can be slower and more expensive to send.
  • InVastor Coin is optimized for speed, low cost, and everyday transactions.


Analogy:


  • Sending Bitcoin = mailing a package. Reliable, but takes time and effort.
  • Sending InVastor Coin = sending a WhatsApp message. Instant, cheap, and global.

💡 Mini Exercise: Imagine you want to send money to a family member overseas. Which coin would be more practical for daily remittances—Bitcoin or InVastor Coin? Why?


✅ End of Module 2


Quick Recap:

  • Blockchain = a public notebook that cannot be erased.
  • Crypto is secure because it’s decentralized and verified by many computers.
  • Wallets store the keys to your coins (hot = easy, cold = safe).
  • Sending crypto is fast and borderless, with InVastor Coin built for speed and daily use.



Module 1: The Basics of Cryptocurrency

Module 3: Using Crypto in Real Life

Module 4: The Bigger Picture

Module 5: Step Into Action

InVastor Crypto Education Series - Your Step-by-Step Guide to Understanding Cryptocurrency, Bitcoin, and InVastor Coin

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