As my first push after studying what cryptocurrency means, I think for better understanding and to some of my followers that are new to the system can benefit from this my short review of crypto understanding.
To start with, I sighted as a particular contest on HOdlcoin which is based on the publication of crypto understanding.
First, what is cryptocurrency?
Cryptocurrency is a digitalised currency in which has a techniques called cryptography and this is what is used to regulate the generation of units of currency and thereafter verify the transfer fund.
It is decentralized which means it operates independently of any central authority or individual.
Also, I understand that the supply of money is regulated by software and the agreement of the users of the system. The transaction in the crypto world is irreversible.
What are the importance of cryptocurrency
From my little understanding I can see that cryptocurrency is easy to use and in fact is free to transfer and hold. You don't need to know who is transferring the coin to you so it is anonymous payment.
When we talk about fund transfer just in some seconds you can transfer billions of coin to an individual because the mode and system are super faster than our local transaction and the transaction is usually cheap.
In the crypto world there is no intermediary such as Bank, so users are free to carry out whatsoever transaction they want to make.
It is clear also that in the çrypto world nothing yo hide because transparency is always maintained through public ledger system.
Cryptocurrency Evolution
Cryptocurrency history begins with the first cryptocurrency and used SHA-256d as hashing function and the currency is known as Bitcoin in 2009. The evolution continue with decentralized DNS called Namecoin in April 2011, followed by Litecoin in October 20011, Peercoin in 2012, Monero in 2014.
All this coin has there description, and that is what all leverage upon.
Bitcoin, being the first decentralized peer to peer payment network powered by its users, the payment are recorded in public ledger using the unit of currency BTC
1BTC = 100,00,000 Satoshi
From my research, it is cleared that 21Million bitcoin's will be created or mined until the year 2140 which means bitcoin is protected against inflation. It is completely an opensource.
Transaction Process
I understand little transaction with bitcoin, I am trying to familiarise myself with them and another token too.
Bitcoin transaction process is simple.
Every transaction that even happened recorded on one global ledger in cryptocurrency. The sender will start by initiating a bitcoin payment using wallet software. This and the other pending transaction are broadcast on the global bitcoin network
I also understood that every 10mimutes or so, miners specialized computers on this network and collect a few hundred transactions and combine them in a block. For mining a block and validate the transaction, there is competition between miners to solve a difficult mathematical equation ( a hash function). The miner that solves the equation first further processes the block and broadcasts this proof of work to the bitcoin network. On the other side, order miner checks the proof of work and validity of the transactions. If they approve, the winning miner gets a reward (25 bitcoins), which is the incentive for miners to provide computing power.
Thereafter this the mined block is added to the blockchain, the unbreakable ledger and serves as a record of all transaction. At this juncture, the bitcoin would have arrived the provided wallet by the user.
Summary
It is good to know the importance of cryptocurrency but at the same time the shortcoming. The risk and failure of cryptocurrency are in the areas of implementation, lack of reliability, deflation, instability. Money laundering and purchase of illegal goods is part of the policy that makes cryptocurrency failure.
In the whole expression, cryptocurrency opens financial freedom to all if you understand how to use it.
Thank you for reading my submission.