What is Cryptocurrency?

mileplatform (28)in #cryptocurrency • 6 years ago

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What is Cryptocurrency?

The word root “crypto” in the English language, it comes from the Greek, meaning
“hidden” or “private.” From it, we get words like “encryption” and “decryption,” which

Cryptocurrencies, sometimes called virtual currencies, digital money/cash, or tokens,are not really like U.S. dollars or British pounds. They live online and are not backed by a government. They’re backed by their respective networks. Technically speaking, cryptocurrencies are restricted entries in a database. Specific conditions must be met to change these entries. Created with cryptography, the entries are secured with math, not people.

For example, when you send some Cryptocurrency to your friend Cara, you’re creating and sending a restricted entry into the Cryptocurrency network. The network makes sure that you haven’t not the same entry twice; it does this with no central server or authority. Following the same example, the network is making sure that you didn’t try to send your friend Cara and your other friend Alice the same Cryptocurrency.

The peer-to-peer network solves the “double-spend” problem (you sending the same Cryptocurrency to two people) in most cases by having every peer have a complete record of the history of all the entries made within the network.

The entire history gives the balance of every account including yours. The innovation of cryptocurrency is to achieve agreement on what the history is without a central server or authority.

What can you do with Cryptocurrency

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In the past, trying to find a merchant that accepts cryptocurrency was extremely difficult, if not impossible. These days, however, the situation is completely different.

There are a lot of merchants — both online and offline — that accept Cryptocurrency as the form of payment. small local shops, bars and restaurants. Bitcoins can be used to pay for hotels, flights, jewelery, apps, computer parts and even a college degree.

Other digital currencies like Litecoin, Ripple, Ethereum and so on aren’t accepted as widely just yet. Things are changing for the better though, with Apple having authorized at least 10 different cryptocurrencies as a viable form of payment on App Store.

Of course, users of cryptocurrencies other than Bitcoin can always exchange their coins for BTCs. Moreover, there are Gift Card selling websites like Gift Off, which accepts around 20 different cryptocurrencies. Through gift cards, you can essentially buy anything with a cryptocurrency.

Finally, there are marketplaces like Bitify and OpenBazaar that only accept cryptocurrencies.

The value of Cryptocurrency

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Many people believe that cryptocurrencies are the hottest investment opportunity currently available. Indeed, there are many stories of people becoming millionaires through their Bitcoin investments. Bitcoin is the most recognizable digital currency to date, And just before BTC was valued at $800. In December 2017, the price of one Bitcoin exceeded $19,000.

Ethereum, perhaps the second most valued cryptocurrency, has recorded the fastest rise a digital currency ever demonstrated. Since January 2017, its value increased by at least 9,162 percent.

The highest rate of growth of cryptocurrency in 2017 was ripple (XRP). Ripple has been a big hit with the bank’s new payment system, along with unfamiliar cryptocurrency like the New Economy Movement (NEM), ARDR and DASH. The chart shows the top 10 cryptocurrency in 2017, along with bitcoin, which ranks 14th.

Mining

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In the blockchain, “mining” is a term applied to the processing activity of powerful computers, all interconnected on the blockchain ecosystem, working to solve a cryptographic puzzle.

The integrity of the blockchain as a whole is verified with this cryptographic puzzle, called a “hash.”

With it, all the blockchain’s transactions are agreed upon in their current state, and the miner is rewarded with native cryptocurrency.

Mining offers an incentive to miners to help power the network and keep it secure.

The blockchain network deals with this by collecting all of the transactions made during a set period into a list, called a “block.” It’s the miners’ job to verify and confirm those transactions and write them into a general ledger viewable to the world.