What is Cryptocurrency: The Ultimate Guide to ( Crypto – Block-Chain )
What is Cryptocurrency: The Ultimate Guide
What is Cryptocurrency: The Ultimate Guide by FxPremiere Group.
What is cryptocurrency: 21st-century unicorn money of the future?
This intro explains the most important thing about cryptocurrency. After you finish reading it you‘ll know more about it than most others.
Today cryptocurrencies have become a global era known to most people. While still some geeks do not understand, banks, governments and many companies are aware of its importance.
In 2016, you‘ll have a hard time finding a major bank, a big accounting firm, a prominent software company or a government that did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-projections.What is Cryptocurrency: The Ultimate Guide.
But beyond the loud noise and the releases that overwhelming majority of people – even bankers, consultants, scientists, and developers – have a very limited knowledge about cryptocurrencies.
What are cryptocurrencies?
What is cryptocurrency and how cryptocurrencies emerged as digital cash replacement
Few people know, but cryptocurrencies emerged as a side product. Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency.
Where did cryptocurrency originate from?
In his announcement of Bitcoin in late 2008, Satoshi quoted he developed “Cash System for peer to peer ( awesome idea ).“
His goal was to invent something; many people failed to create before digital cash.
To realize digital cash you need a payment network with accounts and transaction. FxPremiere Group saw this issue like many others did – One major problem every payment network has to solve is to prevent the so-called (double spending): to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances seen.
In a decentralized system you don‘t have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.
The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed.
Confirmation is a critical concept in cryptocurrencies transaction trading. You could say that cryptocurrencies are all about (confirmation).
As long as a transaction is unconfirmed, it is pending and can be forged. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it can‘t be reversed, it is part of an immutable record of historical transactions: of the so-called blockchain basic cryptocurrency trading.
Only miners can confirm transactions. This is their job in a cryptocurrency-network to check the security of such transactions. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.
For this job, the miners get rewarded with a token of the cryptocurrency.
But how can these entities keep a leveled up about these records?
If the peers of the network disagree about only one single, minor balance, everything is broken. They need an absolute in order or leveled up. Usually, you take, again, a central authority to declare the correct state of balances. But how can you achieve consensus without a central authority?
Nobody did know until Satoshi emerged out of nowhere. In fact, nobody believed it was even possible. What is Cryptocurrency: The Ultimate Guide.
Satoshi proved it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution – the part that made the solution thrilling, fascinating and helped it to roll over the world.
What are miners doing?
The miners Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. Imagine someone creates thousands of peers and spreads forged transactions. The system would break immediately.
So, Satoshi set the rule that the miners need to invest some work of their computers to qualify for this task. In fact, they have to find a hash – a product of a cryptographic function – that connects the new block with its predecessor. This is called the Proof of Work for miners logged. In Bitcoin, it is based on the SHA 256 Hash algorithm.
And what do you need to know about cryptocurrency?
You don‘t need to understand details about SHA 256. It‘s only important you know that it can be the basis of a puzzle the miners compete to solve day in dy out. After finding a solution, a miner can build a block and add it to the block-chain. As an incentive, he has the right to add a so-called coin-base transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.
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Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break.
What are cryptocurrencies really?
If you take away all the noise around cryptocurrencies and reduce it to a simple definition, you find it to be just limited entries in a database no one can change without fulfilling specific conditions. This may seem ordinary, but, believe it or not: this is exactly how you can define a currency. What is Cryptocurrency: The Ultimate Guide.
Transactional properties ( CryptoCurrency ) :
1.) Irreversible: After confirmation, a transaction cannot be reversed. And nobody means nobody its a one way street. Not you, not your bank, not the president of the United States, not Satoshi, lol not your miner. Nobody. If you send money, you send it. Period. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net whatsoever.
2.) Fast and global: Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes.
3.) Secure: Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency.
4.) Permissionless: You don‘t have to ask anybody to use cryptocurrency. It‘s just a software that everybody can download for free. After you installed it, you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.
Why should you learn more about cryptocurrency?
Take the money on your bank account: What is it more than entries in a database that can only be changed under specific conditions? You can even take physical coins and notes: What are they else than limited entries in a public physical database that can only be changed if you match the condition than you physically own the coins and notes? Money is all about a verified entry in some kind of database of accounts, balances, and transactions.read more on What is Cryptocurrency: The Ultimate Guide.
How miners create coins and confirm transactions
Let‘s have a look at the mechanism ruling the databases of cryptocurrencies. A cryptocurrency like Bitcoin consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account.
A transaction is a file that says, “Bob gives X Bitcoin to Alice“ and is signed by Bob‘s private key. It‘s basic public key cryptography, nothing special at all. After signed, a transaction is broadcasted in the network, sent from one peer to every other peer. This is basic p2p-technology. Nothing special at all, again.
Cryptocurrencies are digital gold. Sound money that is secure from political influences of-course. Money that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to serve as a means of payment for black markets and any other outlawed economic activity.
The one and only, the first and most famous cryptocurrency. Bitcoin serves as a digital gold standard in the whole cryptocurrency-industry, is used as a global means of payment and is the currency of cyber-crime like dark-net markets. How and What is Cryptocurrency: The Ultimate Guide by FxPremiere Group – After seven years in existence, Bitcoin‘s price has increased from zero to more than 750 Dollar, and its transaction volume reached more than 200.000 daily transactions.
There is not much more to say: Bitcoin is here to stay forever.
The brain-child of young crypto-genius Vitalik Buterin has ascended to the second place in the hierarchy of cryptocurrencies. Other than Bitcoin its block-chain does not only validate a set of accounts and balances but of so-called states. This means that Ethereum can not only process transactions but complex contracts and programs.
Maybe the less popular – or most hated project in the cryptocurrency community is Ripple. While Ripple has a native cryptocurrency – XRP – it is more about a network to process IOUs than the cryptocurrency itself. XRP, the currency, doesn‘t serve as a medium to store and exchange value, but more as a token to protect the network against spam.
Ripple Labs created every XRP-token, the company running the Ripple network, and is distributed by them on will. For this reason, Ripple is often called pre-mined in the community and dissed as no real cryptocurrency, and XRP is not considered as a good store of value.
Banks, however, seem to like Ripple. At least they adopt the system with an increasing pace.
Litecoin was one of the first cryptocurrencies after Bitcoin and tagged as the silver to the digital gold bitcoin. Faster than bitcoin, with a larger amount of token and a new mining algorithm, Litecoin was a real innovation, perfectly tailored to be the smaller brother of bitcoin. “It facilitated the emerge of several other cryptocurrencies which used its codebase but made it, even more, lighter“. Examples are Dogecoin or Feathercoin.
While Litecoin failed to find a real use case and lost its second place after bitcoin, it is still actively developed and traded and is hoarded as a backup if Bitcoin fails.
Besides those, there are hundreds of cryptocurrencies of several families. Most of them are nothing more than attempts to reach investors and quickly make money, but a lot of them promise playgrounds to test innovations in cryptocurrency-technology.
What is the future of Cryptocurrency?
The digital market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerging, early adopters get wealthy and investors lose money. Every cryptocurrency comes with a promise- FX or Crypto What is Cryptocurrency: The Ultimate Guide
“In 1.5 years from now, I believe cryptocurrencies will be gaining legitimacy as a protocol for business transactions, including micro-payments, and overtaking Western Union as the preferred remittance tool. Lets read more on What is Cryptocurrency: The Ultimate Guide by US – Regarding business transactions – you’ll see two paths: There will be financial businesses which use it for it’s no-fee, almost instant ability to move any amount of money around, and there will be those that utilize it for its blockchain technology. Blockchain technology provides the largest benefit with trustless auditing, single source of truth, smart contracts, and color coins.” CEO – FxPremiere.com”
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