CryptoCurrency

What is Cryptocurrency?

As per INVESTPEDIA, a cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of cryptography like security feature. It is not issued by any central authority or central bank. Thought cryptocurrency have become a global phenomenon known to most people but somehow geeky and not understood by many people. Although you would have a hard time finding a major bank, accounting firm, software company and even the government did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-project.

Cryptocurrency emerged a s a side product of another invention that is Satoshi Nakamoto, the inventor of bitcoin, the first and still most important cryptocurrency never intended to invent a currency. It is a “Peer to Peer Electronic Cash System.” It was basically he had found a way to build a decentralized digital cash system.

To realize digital cash you need a payment network with accounts, balances and transaction. That is known to everybody. But one major problem every payment network has to solve is to prevent double spending i.e. to prevent one entity spends the same amount twice and this is done by a central server which keeps relevant records about the balance. But in a decentralized system, central server not required and every single entity of this network 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.

Bitcoin created in 2009 which was the first cryptocurrency and since then numerous other cryptocurrencies have been developed and also called altcoins as a blend of alternative coin.

 

I have attached youtube video which should give you a further bit clarity on crypto currency.

Click here!

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