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The Cryptocurrency – an overview



The Cryptocurrency - an overview

The world has already jumped into the digital medium and ‘cashless economy’ and made us come to a point of learning and updating every single day. And with the entry of Bitcoin, it is necessary for us to keep ourselves updated in the so-called ‘digital’ medium. So what is cryptocurrency and why is it quite famous these days? This is the question today and many of us have been told by our friends or families that this is good, or this is fraud or bad. But what is the truth and what is exactly lies behind the scenes of this ‘Cryptocurrency’? Let’s have a look.

what is cryptocurrencyv

The definition:

Firstly, we are sure it is not the tangible currency we touch, feel, and use every day. This is some kind of entity that can’t be seen but will be felt and will make us believe that the transaction has been done. Officially, the definition goes like this, ‘Cryptocurrencies are a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions’. In much simpler words it can be put together as, a medium without a third party involvement to control the supply and demand of the currency like a bank. So this is a decentralized medium that produces the cryptocurrency system collectively at a rate that is defined when the system is created and it is publically known. The existing cryptosystem, the Bitcoin, was created by Satoshi Nakamoto in January 2009, the identity of the same remains unknown till date. Satoshi came out of nowhere and he proved that a system can be built without a central authority. In fact, his aim was to bring a peer-to-peer electronic cashing system.

The reality:

In reality, cryptocurrencies are just limited entries in a database that no one can change without fulfilling specific conditions. The network consists of peers, and every peer has a complete history of all transactions and if your transaction is approved that means the whole network is aware of it.

On the contrary, confirmation is a critical concept in cryptocurrencies or you may also say that they are all about confirmation and this is where the Miners take the role. Miners are basically crypto-puzzle solvers and confirmers of the transaction from an authoritarian system and it has the toughest mechanism to prevent one ruling party from abusing the entire transaction. Satoshi set the rule that miners have to perform before they can confirm any transaction.

So, on a concluding note, this is a drop of the information that is shared from the ocean, but it can be very useful and interesting once learned properly.

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