The short and easy reply to the title question is that cryptocurrency is decentralized digital money. But what exactly does that mean and how will it work? In this guide, I’ll answer the questions you have about cryptocurrency. I am going to let you know when it was invented, the way it works and why it? gonna be essential down the road. At 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? no time to waste. Let? get going! When I hear a whole new word, I search for its definition in my dictionary. Cryptocurrency is a new word for most of us so let? write a crypto definition.
Mining – Miners attempt to solve mathematical puzzles first to place the following block on the blockchain and claim a reward.
Exchange – An exchange is really a business (often a website) that you can buy, sell or trade cryptocurrencies.
Wallets – Cryptocurrency wallets are software packages that store public and private keys and enable users to send out and receive digital currency and monitor their balance.
Crypto Definition – Below is a listing of six things which every cryptocurrency has to be in order for it to be called a cryptocurrency;
Digital: Cryptocurrency only exists on computers. You will find no coins and no notes. There are no reserves for crypto in Fort Knox or the Bank of England!
Decentralized: Cryptocurrencies don? have a central computer or server. They are distributed across a network of (typically) 1000s of computers. Networks with no central server are classified as decentralized networks.
Peer-to-Peer: 加密貨幣交易所 are passed for every person online. Users don? deal together through banks, PayPal or Facebook. They deal with each other directly. Banks, PayPal and Facebook are trusted third parties. You can find no trusted third parties in cryptocurrency! Note: These are called trusted third parties because users need to trust them using their personal information in order to make use of their services. As an example, we trust the bank with the money and we trust Facebook with the holiday photos!
Pseudonymous: This means that you don? must give any private information to own and utilize 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 means that users don? have to trust the device for this to work. Users are in complete charge of their funds and information all the time.
Encrypted: Each user has special codes that stop their information from being accessed by other users. This is called cryptography and it? extremely difficult to hack. It? also where crypto part of the crypto definition originates from. Crypto means hidden. When details are hidden with cryptography, it is encrypted.
Global: Countries have their own currencies called fiat currencies. Sending fiat currencies all over the world is tough. Cryptocurrencies can be sent worldwide easily. Cryptocurrencies are currencies without borders!
This crypto definition is a great start however you?e still a long way from understanding cryptocurrency. Next, I wish to let you know when cryptocurrency was developed and why. I?l also answer the question ?hat is cryptocurrency attempting to achieve??
The Foundation of Cryptocurrency – During the early 1990s, many people were struggling to know the web. However, there have been some very clever folks who had already realized just what a powerful tool it really is. Many of these clever folks, called cypherpunks, thought that governments and corporations had too much power over our everyday life. They wanted to use the web to provide the folks of the world more freely. Using cryptography, cypherpunks desired to allow users from the internet to possess more control over their cash and information. As you can tell, the cypherpunks didn? like trusted third parties whatsoever!
On the top in 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 must be cryptocurrencies but neither had all of them. In the end of the the nineties, both had failed. Satashi Nakamoto creator of bitcoinThe world will have to wait until 2009 before the initial fully decentralized digital cash system was developed. Its creator had seen the failure of the cypherpunks and thought that they might do better. Their name was Satoshi Nakamoto and their creation was called Bitcoin.
Bitcoin became very popular amongst users who saw how important it might 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 price of a single Bitcoin is 7,576.24 US Dollars. Which is still an excellent return, right? During 2010, a programmer bought two pizzas for ten thousand BTC in iclbje of the first real-world bitcoin transactions. Today, 10,000 BTC is equal to roughly $38.1 million ? a big price to fund satisfying hunger pangs.