Today Monica, our crypto author & enthusiast at Techie Scoops explores all about cryptocurrency, basic information, latest updates and news.
“Firstly you all need to know what cryptocurrency is”,
WHAT IS CRYPTOCURRENCY?
Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
IS CRYPTOCURRENCY 21ST CENTURY UNICORN OR THE MONEY OF THE FUTURE?
As of today cryptocurrencies (BUY CRYPTO) have a global phenomenon known to most people. Only a few people know, but cryptocurrencies emerged as a side product of another invention.
Satoshi Nakamoto, the unknown inventor of BITCOIN, the first and still most important cryptocurrency, never intended to invent a currency. In his announcement of Bitcoin in late 2008, Satoshi said he developed “ A Peer-to-Peer Electronic Cash System.” Basically, his goal was to invent something; many people failed to create before the digital crash.
In Satoshi’s invention, the most important part was that he found a way to build a decentralized digital cash system. In the nineties, there have been many attempts to create digital money, but all failed. After seeing all the centralized attempts fail, Satoshi tried to build a digital cash system without a central entity. Like a Peer-to-Peer network for file sharing. This decision became the birth of CRYPTOCURRENCY.
Basically, cryptocurrencies are entries about token in decentralized consensus databases. They are called cryptocurrencies because the consensus-keeping process is secured by strong cryptography.
Cryptocurrencies are built on cryptography. They are not secured by people or by the trust but by math.
THE CRYPTOCURRENCY BASICS
To understand how cryptocurrency works, you will need to learn a few basics concepts specifically:
Public ledgers: All confirmed transactions from the start of a cryptocurrency’s creations are stored in a public ledger. The identities of the coin owners are encrypted, and the system uses other cryptographic techniques to ensure the legitimacy of record keeping. The ledger ensures that corresponding “digital wallets” can calculate an accurate spendable balance. Also, a new transaction can be checked to ensure that each transaction uses only coins currently owned by the spender. Bitcoin calls this public ledger a “transaction block chain.”
Transaction: A transfer of funds between two digital wallets is called transaction. The transaction gets submitted to a public ledger and awaits confirmation. Wallets use an encrypted electronic signature when a transaction is made. The signature is an encrypted piece of data called a cryptographic signature and it provides a mathematical proof that the transaction came from the owner of the wallet. The confirmation process takes a bit of time (ten minutes for bitcoin) while “miners” mine. Mining confirms the transaction and adds them to the public ledger. Mining: Mining is the process of confirming transactions and adding them to a public ledger. To add a transaction to the ledger, the “miner” must solve an increasingly complex computational problem (like a mathematical puzzle). Mining open source so that anyone can confirm the transaction. The first “miner” to solve the puzzle adds a “block” of a transaction to the ledger. The way in which transactions, blocks, and the public blockchain ledger work together ensure that no individual can easily add or change a block at will. Once a block is added to the ledger, all correlating transaction are permanent, and they add a small transaction fee to the miner’s wallet (along with newly created coins). The mining process is what gives value to the coins and is known as proof-of-work scheme.
HOW DOES CRYPTOCURRENCY WORK?
What a new user needs to know: Cryptocurrency is roughly the equivalent of using Paypal or a debit card, except the numbers on the screen represent cryptocurrency instead of fiat currency like a dollar. All a new user needs to do is set up a Coinbase account. Coinbase users can buy, sell, send, receive, and store Bitcoin, Bitcoin cash, Ether, and Litecoin. Cryptocurrency works a lot like bank credit on a debit card. The main difference between cryptocurrency and a bank credit is that instead of bank credit is that instead of banks and governments issuing the currency and keeping ledgers, an algorithm does. So after knowing some basic and important information about cryptocurrency, let’s now talk about the future of cryptocurrencies.
WHAT IS THE FUTURE OF CRYPTOCURRENCY?
After all the ups and down cryptocurrency had, the cryptocurrency market gives us somewhat intelligent guess as to what we can expect in the future:
1. Cryptocurrencies will receive more patronage from institutional investors. More governments are looking into the regulation of cryptocurrencies, investors are feeling more comfortable about putting their funds into them.
2. Why are cryptocurrencies being regulated?
Lack of security has long been one of the biggest concerns for traders. In fact, a survey conducted by Encrybit, a cryptocurrency exchange platform, revealed that 40% of the participants polled saw security as a major concern. At times, hackers and cybercriminals have already taken advantage of the lack of cryptocurrency regulation and made trading in these currencies unsafe for investors.
3. Cryptocurrencies won’t stop being volatile.
Even after all the measures to ensure stability in the cryptocurrency market, it’s still a struggle to stop or at least reduce cryptocurrencies volatility. There are many factors keeping them volatile. Although regulation of the currency and their markets will help lower volatility, that alone will not be enough to make a considerable difference in cryptocurrencies volatile nature. In short, cryptocurrencies won’t stop being volatile. And that’s something any investor should plan for.
LATEST NEWS AND UPDATES ON CRYPTOCURRENCY:
- Coinbase index fund opens for Investments between $250k and $20mIn: This is great news in opening the gates for those institutional investors.
- Many ICOs will not succeed but those that can do can potentially become huge. For example- Binance. This is a very good example of a very fast growing and successful company in the cryptocurrency space.
- This one is the great news for the cryptocurrency market as the SEC determines that Ethereum is NOT a security.
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(Read More: Top 10 Cryptocurrency & Blockchain events in 2018 )
Article By Monica Katare