What is Cryptocurrency and how does it work?

 

Cryptocurrency - definition 

A cryptocurrency or crypto is a form of digital currency, based on blockchain technology that allows the ownership, transfer, and exchange of cryptocurrencies. It was invented in 2009 by a person or group of people who are known as Satoshi Nakamoto, but it uses cryptography to ensure secure transactions.

What is Bitcoin Coin?

Bitcoin also commonly refers to " Bitcoin", which is an anonymous internet-based, free payment system that helps you get access to your cryptocurrency using a web browser. The name is a reference to 2008 when bitcoin became popular among crypto users. In 2017, Bitcoin hit $20,000 for a single coin, making it the most valuable cryptocurrency. While many other currencies use cryptocurrency, Bitcoin has become the dominant currency because it has higher levels of adoption, with more than 1.3 million wallets online.

Bitcoin's creator Satoshi Nakamoto speaks about this Bitcoin Cash (BCH) coin, stating:

Bitcoin Cash (BCH), written with love. I'm not sure if anyone can call this BCH like mine. But, whatever they're doing here doesn't make sense. And yes, our goal is to replace the BCH. So to speak. Anyone who thinks otherwise needs to check out the source code. You can find some interesting stuff there. Especially the fork changes that take place in the future...

Bitcoin transactions are recorded into the public ledger. This ledger is made up of blocks of virtual information . These blocks are connected by chains. Each block contains instructions to the network how to handle and update them. When new transactions are made, all transactions from previous transfers' data are included in the chain. To validate these transactions, miners have to verify certain criteria such as the sender's address, a nonce, and a hash of the transaction. After getting an approved address and nonce, the user enters their password and is allowed to enter their desired amount. They then use this password to send the money to someone else. Once receiving the funds, the transferred money is immediately confirmed, and it can be stored in the wallet.

Bitcoin Lite is a cryptocurrency that offers lower costs compared to Bitcoin. Other forms of currency can be used for trading as well. All of the coins can be converted to another currency. For example, it can be traded between USDT (the official currency of Vietnam) and RMB (the official currency of China).

The Blockchain

Blockchain technology makes sure all transactions on Bitcoins are verified, and there is no way to change the blocks until nobody can. An estimated 10,000 Bitcoins were created every day before 2019. That number grew to 100,000 each day after July 2015. As of now, Bitcoin is valued at around US$8,700. Bitcoin only came into existence in January 2009. The value of the price of Bitcoin will depend on how much time a business takes. There is also a market in Australia where businesses can purchase its cryptocurrency. The first Bitcoin to be released was mined in November 2009. Since then, there have been several forks, including Ethereum.

Bitcoins vs Ethereum

Bitcoin mining is the process of making bitcoins from different computers. This process produces the Bitcoins that we see today. However, it is one of the key factors to the success of any cryptocurrency. Its mining requires a high level of energy. With Bitcoin, it is powered by millions of dollars, while ETH has a minimal electricity requirement. Also, both coins have the same structure. Both coins follow a similar formula in terms of how they make transactions.

Bitcoin is essentially a decentralized public ledger. Ethere Monero is a more centralized version of Bitcoin that is only accessible to specific individuals. Most people can use its platform to purchase, but it cannot be controlled or held for the general public.

Overall Thoughts on Crypto Currency

Crypto currency is here to stay. Many investors claim it is going to continue to grow, regardless of what happens to traditional currencies like gold and silver. Some believe the growing acceptance is due in large part to social media influencers promoting new ways of investing that don't involve actual money. According to Forbes, the average investor in 2018 is worth an estimated US$21,800.

The growth in popularity also leads to more volatility. People are interested in cryptocurrencies, but they are still unsure of their real returns. If the current trends continue, the world could face major issues related to inflation and interest rates.