Cryptocurrency is a disruptive technology that is changing the way we do business. It’s still in its infancy, and there are many challenges to overcome before it can become mainstream, but it has the potential to completely disrupt the way we think about money.
This blog will explore all aspects of cryptocurrency, and will provide insight into the many questions surrounding this emerging field. If you have comments or suggestions, please feel free to contact me and I will respond as soon as possible.
The most important thing about Bitcoin is that it works. It’s not the most interesting or well-designed or easy to use or whatever. It is a working system, and more than any other system, it has a proven track record of working. It has been running for years and years now, in different forms, because it works.
If you want to know what’s going on with cryptocurrency today-who is using it, where they are using it, what kind of problems they run into-the best place to look is the personal blog of someone who studies the space. That’s my blog.
I’ve spent the last few months writing about Bitcoin and cryptocurrency as a hobby . I make no money from doing this, except for purchases I make with Bitcoin (because I was paid in Bitcoin). That makes me no more qualified than anyone else to write about the state of cryptocurrency; I’m just somebody who likes to write about it for fun.
Cryptocurrencies are in a state of deflation. As the market gets bigger, the value of each unit decreases. We’re in a deflationary period right now, as the market grows.
So we can’t talk about investing in bitcoin or other cryptocurrencies without considering how the deflation will affect their price. The prices are going up because people think they will go up, not because their intrinsic value is going up.
There’s a lot of bad advice out there about how to pick which coins to buy and when to buy them.
Cryptocurrencies are sometimes called “digital gold,” and that’s not wrong. But it doesn’t explain much. Cryptocurrencies are a new kind of money, not a new kind of gold.
Gold is a kind of money. It’s not just as good as money any more than dollars are just as good as cash. The dollar is better than the Euro in some respects, but it’s not better in every respect. When people think about cryptocurrencies, they often imagine them as digital gold: digital currency that can be used for transactions or stored for investment or whatever. And that’s true enough, but it leaves out the biggest thing about cryptocurrencies: they’re also really good at being money.
It might seem obvious that something like bitcoin could be used to make payments online. But if you’ve been paying attention in the last year, you probably noticed that this is already happening—and in ways that have nothing to do with bitcoin.
Another thing people often leave out is that cryptocurrencies are a new kind of network, not just a new kind of currency. If you think about bitcoin the way you think about email, you’ll have trouble imagining how it could be used to do anything other than send payment messages. But if you think of bitcoin as more like the
Bitcoin is the best-known example of a cryptocurrency. The term “cryptocurrency” has a wide range of meanings. It might refer to a specific programmable digital currency or to any digital currency at all. Or it might refer to an entire category of financial instruments: cryptographic securities, virtual currencies, tokenized securities, smart contracts and so on. Cryptocurrencies have become big news in recent months; but the topic isn’t new.
In the early 1990s, cryptographer David Chaum started talking about a new kind of electronic cash that would be untraceable and non-repudiable. After several years work, he designed a system called ecash that included a special kind of database that could be used to track transactions and prevent double spending, but only if everyone chose to use it–that is, if everyone accepted the algorithm Chaum was proposing.
This led to Chaum’s famous paper that came out in 1998 as “Secrecy and Privacy in Digital Communications.” The paper proposed using public key cryptography to create secure digital signatures (hashing) and anonymous digital cash (crypto).
Bitcoin is the first cryptocurrency to solve the double-spending problem without using a trusted authority.
The way I describe it, Bitcoin is the first basically sound decentralized electronic cash system that uses a proof of work scheme instead of a proof of stake scheme. The biggest problem most people have with it is that it’s not really electronic cash.
You can cash out your Bitcoins to dollars and buy things electronically, but you can also just keep them in bitcoin wallets like you would keep any other currency.
So Bitcoin isn’t really electronic cash; it’s electronic dollar bills. But it is electronic money, which means you can do things with it that you couldn’t do before, such as online gambling.
And before someone asks: No, there doesn’t need to be some abusable backdoor in the algorithm or anything like that; this is already how credit cards work. You just have to follow the rules.
Cryptography is the study of coded messages. Cryptography is what encrypts and decrypts those messages, using a key guarded by the sender and recipient.
Cryptography has been around for a long time, but it has only recently come into its own. The Internet changed everything about how cryptography will be used in the future. To begin with, the Internet has made it possible to send and receive encrypted messages without either party knowing what’s in them, or even who sent them. And because messages can be transmitted without revealing their contents, there’s no longer a need for a trusted third party (a “middleman”) to mediate their transfer.
The Internet also made feasible some kinds of encryption that were previously difficult or impossible to do on multiple computers at once: encryption that works even if someone tries to copy your computer’s hard disk, or makes changes to it while you aren’t looking, or alters its settings while you’re not logged in.