The purpose of this blog is to provide a simple, easy to understand explanation of cryptocurrencies. The blog is designed for people who are new to the subject, and it will also be helpful for people who have heard about cryptocurrencies but still don’t fully understand them. If you already know about cryptocurrencies then this blog might not add anything new for you.
Cryptocurrencies are digital currencies that use cryptography as a means of security. Cryptography is used to protect the transactions and to control the creation of additional units of the currency. Cryptocurrencies are usually decentralized networks based on blockchain technology. The individual coins are referred to as tokens and each token has its own ledger. These tokens can be transferred directly between individuals without the need for a central authority like a bank or government.
Cryptocurrency works using a technology called blockchain. Blockchain is an open source distributed ledger that records transactions between two parties in a verifiable and permanent way. This ledger can be shared across multiple computers so that everyone has access to it at all times.
The history of cryptocurrency goes back to 1991 when Stuart Haber and W Scott Stornetta described how they could use Merkle trees to store data securely in such a way that it would be impossible to tamper with the data without
What’s in a name? Well, when it comes to cryptocurrency, quite a lot. These days, there are hundreds of different cryptocurrencies out there and the names tend to differ wildly. Some are named after animals, others are named after food or things from popular culture. In this blog post I will give an introduction to the different types of cryptocurrencies and where they got their names from. This blog post is aimed at people who have heard about cryptocurrency but know nothing about it.
Bitcoin: The original and most well known cryptocurrency. Bitcoin is decentralised so no one controls the network apart from the users themselves. It is also capped at 21 million coins meaning that the more people use it, the more valuable it becomes.
Litecoin: The name just conjures up images of a lighter version of bitcoin doesn’t it? Litecoin is in fact very similar to Bitcoin however it has a faster transaction speed and lower fees. Litecoin was created by Charlie Lee who worked as an engineer at Google before creating his own coin.
Ethereum: Ethereum is named after the element Ether which is used in chemistry as a catalyst for reactions between other substances. Although Ethereum is a cryptocurrency like bitcoin, it has many additional functionality such as smart contracts and dapps (decentralised
An Introduction to Cryptocurrency
The cryptocurrency market is in the midst of a massive rally. Bitcoin has gained more than 100% since the beginning of the year and other cryptocurrencies have followed suit. This surge has sparked interest in many beginner investors who want to get in on the action but aren’t sure where to begin. Here’s an introduction to cryptocurrency for beginners:
What is Cryptocurrency?
Cryptocurrency is a digital currency that uses encryption techniques to regulate the generation of units and verify transactions. Unlike traditional currencies, cryptocurrencies do not have a centralized authority that serves as a regulator and acts as a third party to authenticate transactions. Instead, the verification of transactions is decentralized, which means that it is done by the network itself. Cryptocurrencies are created through what is known as “mining”, which is essentially using powerful computers to solve complex mathematical equations that verify transactions on the blockchain. The reward for mining these coins and verifying these transactions are more units of that particular cryptocurrency. These mining algorithms are designed so that they get progressively more difficult, which prevents miners from creating additional units of the currency beyond what was originally intended by its developers.
As you can see, cryptocurrencies are not just limited to Bitcoin or Ethereum (or Litecoin). There are many
This article is an introduction to the concept of cryptocurrency, and is aimed at those of you who have heard about bitcoin and perhaps ethereum, but don’t really understand what it is or how it works.
Let’s start by looking at what money actually is. Money can be thought of as a token that represents a unit of value. It’s a way to compare different things and say that one thing has more value than another. For example, I could say that a chocolate bar in my hand has more value than a chocolate bar on the other side of the world, because I can consume the one in my hand, but not the one on the other side of the world.
The interesting thing about money is that it is also possible to trade tokens for different tokens. For example, I might be willing to give up the chocolate bar in exchange for ten dollars. The money itself doesn’t have any inherent value (I can’t eat it), but I know I can use it to buy something else that I want, like some new shoes or an ice cream cone.
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. Many cryptocurrencies are decentralized systems based on blockchain technology, a distributed ledger enforced by a disparate network of computers. A defining feature of a cryptocurrency, and arguably its biggest allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.
Cryptocurrencies are digital currencies which use a decentralized system to record transactions and manage the issuing of new units.
Bitcoin was the first cryptocurrency, but many more have been created (known as Altcoins) since then, such as Ethereum, Litecoin, Dogecoin and PotCoin.
Cryptocurrency is different from traditional money in that it doesn’t need a middle man or central authority to facilitate transactions. It uses cryptography to create coins, add transactions to the ledger and verify transactions.
Cryptocurrencies can be used to pay for goods and services or exchanged with other cryptocurrencies or fiat currencies (like USD). They are traded on cryptocurrency exchanges.
Each transaction is broadcast to the network and recorded in a public distributed ledger called a blockchain which verifies all transactions if they are valid. If a transaction is invalid it will be rejected by the network nodes.
The basic concept of cryptocurrencies has captured many people’s interest because of its potential impact on society as a whole. But there has also been some skepticism about whether cryptocurrencies will become widespread in both personal and commercial use due to their volatility and lack of regulation
A cryptocurrency is a digital currency that uses cryptography for security. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
Cryptocurrencies are defined as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. Bitcoin became the first decentralized cryptocurrency in 2009. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of alternative coin.
Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin’s blockchain transaction database in the role of a distributed ledger.
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in