What actually is crypto? |club5050 | by @qaisali49
ASSALAM.U.ALAIKUM!
What is cryptocurrency?
Stage 1:
When the business was in its infancy, there was nothing like money. The problems with such a system are that while you may be perfectly happy to give up your horse, you may just not want a cat, so the trade never takes place, but that's where the currency came in.
Stage 2:
Coins, because they were made of precious materials like gold and silver, everyone just accepted that they were worth something, you heard about the pound sterling, the reason why we called books is that a pound was literally a pound of money and so on. suddenly in the trade, it doesn't matter if you don't want my cat as long as I have coins we can always exchange for your horse even if you don't need money at all because it's a valuable material that you have that reassurance that you can take that coin to give to someone else and exchange it for something you want affordably, but then that evolved.
Stage 3:
Banks established themselves and governments were in control, we realized that as long as there was confidence in the system, we could go from needing to haul blocks of precious metal to something even cheaper than paper- currency does the same but now money doesn't have value because it is made of pure silver it just needs to be valued because the government says it has value like that 10 pound note in UK the note itself is well made, it is actually plastic, they changed it recently because it is stronger but if you look closely you can see that everything this is in fact the bank of england promising that they will pay the bearer of this note 10 pounds in reality this is just a receipt, sort of proof that you have a certain amount of money, but as and when As technologies improved, we found even more convenient ways to store and exchange r our business, now we are in what i would call phase four where more people than ever are buying stuff online and using credit cards and in fact when you are at this point we no longer see our money , it's not about coins or bills or cats it's just spreadsheet rumors like when i buy a music album from amazon all that happens is that my bank adds an entry in my spreadsheet that says Qais is now ten dollars less then the amazon bank adds an entry that says they have ten dollars more so the reason I gave you all this introduction is to give you the context where cryptocurrency is found, it is considered by many to be the most affordable trading era of all time.
Stage 4:
The way to think of a cryptocurrency is that it is 100 virtual. I know the bitcoin logo looks like physical currency, now it's really bitcoin but with cryptocurrencies, there is no gold there is no money there is no paper, in reality, it is only the transfer of digital assets. The basic concept is exactly the same, think of them as spreadsheets literally running who paid what to whom, but instead of multiple banks keeping their own separate books with cryptocurrencies, there is just that. a huge spreadsheet of every transaction done using that currency and this is called the ledger, ok we all have a good spreadsheet.
Why is it becoming important?
There are some distinct advantages to a currency system like this:
Decentralized
It is decentralized, which means that while every transaction of a given cryptocurrency is recorded on the same ledger, there are many copies of that ledger and everyone on the network has one. You may have heard of cryptocurrency mining or bitcoin mining, everyone is someone who sets up a computer to process transactions on their copy of that ledger or spreadsheet. calculation. There are already around a million bitcoin miners in the world and bitcoin is just one type of cryptocurrency which is why they do it well if you devote your computing power to mining, say bitcoin, you will earn bitcoin as compensation. The result is that if I walk into a store and spend five bitcoins on something, instead of just checking with a bank's records, the store checks with every computer on that network instead if I've had enough. and assuming it does, each computer will give the green light, and then each update their records independently.
Blockchain
Blockchain isn't bitcoin, blockchain isn't a currency itself, blockchain is just a kind of safe ledger, so you know that the big table everyone has who records blockchain transactions is just one way to put them in some pretty fun snippets organize, so every time I pay for something with Bitcoin that the transaction is logged as a block. Each block contains transaction data such as z was recorded and the pivot on which this system is based is that the hash of that block changes if something changes in a block. You can see where it is going as each block also contains the data of the previous block, if the hash of the block changes here the next block no longer has a corresponding hash, and therefore every block that follows the next is no longer valid.
Dark Sides of Crypto:
- * One of the main ones is exactly that, the reason why I think many people don't take cryptocurrencies seriously is its volatility because these currencies are so new and are completely digital, unlike the gold market, nobody really knows what they should be worth. worth it and then you find that cryptocurrency prices are pretty highly speculative, they are tied to the news cycle like when a brilliant article about them comes out the prices spiral up, but then when Elon Musk posts a tweet that puts them down.
- * Number 2 is that the undeniable fact that they do not very settle for as a kind of payment in well most places like affirmative I will currently book holidays with crypto I can gift to Wikipedia with crypto however there' been heaps of firms who are pretty back and forth with it Microsoft tesla even burger king are samples of companies who same they were aiming to accept bitcoin so they said they weren't going to accept bitcoin.
- * There's also, a pretty strong sentiment that because there's no real policing or regulation on crypto right now it's like the perfect currency for criminals but to be honest I think the data speaks for itself on that one according to chain analysis 0.34 percent of crypto transactions are criminal up to 5 of normal cash transactions are criminal and I think that's because it's a bit of a misconception that currencies like bitcoin are anonymous they're actually pseudonymous which means that even though your actual details aren't visible to everyone your public key your unique identifier will be permanently baked into the blockchain upon making transactions with it so cash is just a better currency for most types of criminal activity because by its very nature it's untraceable.
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Once a transaction is recorded on the blockchain, it cannot be altered or deleted. Each block contains a cryptographic hash of the previous block, making it non gamstop casinos extremely difficult for anyone to tamper with the data without being detected.