What is Cryptocurrencies? – Imagine you’re having a conversation with your friends no at some point in this conversation someone’s going to bring up cryptocurrencies or something that everyone wants to talk about. But not really knows how they work. So today I’m Manav Pahwa Going to fix that I’m route from SquadChat.us and this is all about What is Cryptocurrencies?
Today Many of the Bold Currencies had become a Very Important Part of our Lives. As we know it came into existence modern currency included paper currency, credit cards, and digital wallets Such as you are having Apple Pay, Amazon pay, PayPal, and so on. All of this is controlled by banks and governments now which means that there is a centralized regulatory authority.
That limited how paper currency and credit cards worked to imagine the scenario When You Visit a Store and Choose the Last Pair of Shoes and you wished to pay the owner through any digital payment but at that time the Payment Failed due to some Technical Error or Problems in the Payment app or in your Bank Server Like there systems could have been down the machine’s word in working properly and so on that means there’s a central point of failure. Which is the bank the user’s accounts could have gotten hacked for example they could have been attacking or identity theft and so on or the transfer limits for that account for exceeding. This is why the future of currency lies with cryptocurrency.
Imagine there is a transaction between two people having a Bitcoin app. Then there is just a notification asking whether are sure are ready to transfer XXX amount bit cards. Just You have to select Yes and the processing takes place. Clear were authenticating the user’s identity checking whether they have the required balance to make the transaction and other things after that payments are transferred and the payment is received all of this happens in a matter of minutes. It’s as simple as that this, in turn, removes all the problems of modern banking there is no limit to the funds you can transfer your account and your account cannot be hacked. As well as there’s no central point of failure now as of 2018 there are more than 1600 cryptocurrencies available in the market.
Now there are some popular ones like bitcoin, Litecoin, DogeCoin, and a lot more. Nowadays new cryptocurrency takes Birth up every single day now considering how much growth they are having at the moment there’s good just plenty of months ago to come in the upcoming years.
So What is Cryptocurrencies
A cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange. Cryptocurrency is quite similar to real-world currency just that it does not have any physical Body. It uses cryptography to work the way it does no some of the features of cryptocurrency. That there’s a limit to how many units can exist with CryptoCurrency there’s a Limit after that limit there is no more Crypto Currency Unit will be produced.
The CryptoCurrency was First Introduced in 2009 and Today It is Used Worldwide. Nowadays a lot of Transactions are done through Crypto Currencies. We can also say that it’s the Time of Crypto.
So what makes crypto currency so special?
There’s a lot of Reasons that make Crypto Special But in this Blog Post about What is Cryptocurrencies we are just going to point just the Main Points. Firstly this little to no transaction Costs or any Limit. Now if you use a digital wallet you know that if you are transferring money from your wallet to your bank account you pay some amount of money in the form of Fee. As well as if you wish to pay directly from your Bank then you have 24*7 access to money. As you can just walk up to your bank at 3:00 AM in the morning and say that you want to withdraw some money.
In Crypto there are no limits on purchases and withdrawals there is freedom for anyone to use. For Example, if you are setting up an account in your bank you need to do some amount of paperwork and documentation. But with cryptocurrencies, all of that can be avoided international transactions are faster to provide transfer Place about half a data transfer money from one place to another but with cryptocurrencies, it only takes a matter of minutes or seconds.
what’s the crypto in crypto currencies crypto refers to cryptography
It’s a method of using encryption and decryption to secure communication in the presence of third parties. Here 3rd parties refer to those who want to steal your data or want to eat stop on your conversation. Cryptography uses computational algorithms which is the hashing algorithm that quote uses a public key which is like a digital identity of the user with key shares with everyone and a private key which is the digital signature of the user. Which he or she keeps hiding.
Now let’s talk about a normal Bitcoin transaction.
In this article on What is Cryptocurrencies, we are focusing on the Method of transferring Bitcoin. For that firstly you have the transaction details such as the details of the Receivers which you want to send and how many bitcoins you want to send him or her. Then it’s passed through a hashing algorithm for Bitcoin. This user an exchange algorithm that adds the output then that obtain is passed through a signature algorithm with the user private key. Now, this is used to uniquely identify the user.
This output is then distributed across the network for people to verify this is done by using the sender’s public key. The people who verify the transaction to check whether it’s valid or not a known as a minus. Now after this is done the transaction and several other details are added to the blockchain where it cannot be changed again if the concept of hashing seems a little difficult to you.
Visit here to know all about what is Blockchain?
So now coming back, you can understand better now the algorithm as I told you earlier look something like this now seeing how complicated it looks. I’m sure it’s safe to say that the encryption is very difficult to hack today and we will be focusing on two major cryptocurrencies Bitcoin and either
Bitcoin is a digital currency that is decentralized and works on blockchain technology. It uses a peer to peer network to perform transactions
What is Ether
Ether is the currency that’s accepted the Italian network uses blockchain technology to create an open-source platform for building and deploying decentralized applications.
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