The short and easy answer to the title question is that cryptocurrency is decentralized digital money. But what precisely does that mean and exactly how does it work? In this guide, I will answer all the questions you may have about cryptocurrency. I am going to let you know when it was invented, the way it works and why it? likely to be very important later on. By the end of this guide, you? l be able to answer the question, ? That is a cryptocurrency?? for yourself.
The industry of cryptocurrency moves fast so there? virtually no time to waste. Let? get started! When I hear a brand new word, I search for its definition within my dictionary. Cryptocurrency is actually a new word for most people so let? write a crypto definition.
Mining – Miners try to solve mathematical puzzles first to put the following block on the blockchain and claim a reward.
Exchange – An exchange is actually a business (often a website) that you can buy, sell or trade cryptocurrencies.
Wallets – Cryptocurrency wallets are software applications that store public and private keys and enable users to deliver and receive digital currency and monitor their balance.
Crypto Definition – Below is a list of six things that every cryptocurrency should be in order for that it is known as a cryptocurrency;
Digital: Cryptocurrency only exists on computers. You can find no coins with no notes. You will find no reserves for crypto in Fort Knox or the Bank of England!
Decentralized: Cryptocurrencies don? possess a central computer or server. These are distributed across a network of (typically) thousands of computers. Networks with no central server are called decentralized networks.
Peer-to-Peer: 加密貨幣交易所 are passed from person to person online. Users don? deal with each other through banks, PayPal or Facebook. They deal with one another directly. Banks, PayPal and Facebook are all trusted third parties. You can find no trusted third parties in cryptocurrency! Note: These are called trusted third parties because users need to have confidence in them making use of their personal data in order to use their services. For instance, we trust the bank with the money and we trust Facebook with this holiday photos!
Pseudonymous: Which means that you don? must give any private information to obtain and use cryptocurrency. You can find no rules about who can own or use cryptocurrencies. It? like posting on a website like 4chan.
Trustless: No trusted third parties implies that users don? need to trust the program for it to work. Users are in complete control over their money and data constantly.
Encrypted: Each user has special codes that stop their information from being accessed by other users. This is called cryptography and it? nearly impossible to hack. It? also in which the crypto portion of the crypto definition comes from. Crypto means hidden. When information is hidden with cryptography, it really is encrypted.
Global: Countries have their own currencies called fiat currencies. Sending fiat currencies around the world is hard. Cryptocurrencies can be sent around the globe easily. Cryptocurrencies are currencies without borders!
This crypto definition is a good start however you?e still a long way from understanding cryptocurrency. Next, I want to let you know when cryptocurrency was developed and why. I?l also answer the question ?hat is cryptocurrency attempting to achieve??
The Origin of Cryptocurrency – In early 1990s, many people were struggling to comprehend the internet. However, there have been some very clever people that had already realized what a powerful tool it is. Some of these clever folks, called cypherpunks, thought that governments and corporations had a lot of power over our lives. They desired to use the web to give the individuals of the world more freely. Using cryptography, cypherpunks wished to allow users in the internet to have more control over their cash and information. As you can tell, the cypherpunks didn? like trusted third parties whatsoever!
On the top from the cypherpunks, the to-do list was digital cash. DigiCash and Cybercash were both attempts to create a digital money system. They both had some of the six things should be cryptocurrencies but neither had them all. In the end in the the nineties, both had failed. Satashi Nakamoto creator of bitcoinThe world would have to hold off until 2009 before the first fully decentralized digital cash system was developed. Its creator had seen the failure from the cypherpunks and thought that they could do better. Their name was Satoshi Nakamoto along with their creation was called Bitcoin.
Bitcoin became very popular amongst users who saw how important it may become. In April 2011, one Bitcoin was worth one US Dollar (USD). By December 2017, one Bitcoin was worth greater than twenty thousand US Dollars! Today, the cost of one particular Bitcoin is 7,576.24 US Dollars. Which can be still a pretty good return, right? During 2010, a programmer bought two pizzas for ten thousand BTC in iclbje from the first real-world bitcoin transactions. Today, 10,000 BTC is equal to roughly $38.1 million ? a huge price to fund satisfying hunger pangs.