Cryptocurrency
Cryptocurrency:
First let’s divide the lingual as crypto and currency. Here crypto is derived from the word cryptography. On the other hand, currency which is an intermediator to buy good and service also it replaces ancient barter system where no intermediator like money is used and only goods were exchanged to buy goods.
So here comes the conclusion, cryptocurrency is nothing but a type of money but digital money as it was created and stored using code aka cryptography. It is the advanced technology in money system.
Why cryptocurrency?
Usually money is created and stored by banks like fd, saving account, gold etc which acts as an intermediator between us and money. Here our safety depends bank’s safety. As the bank provides
safety they charge some amount to us. Cryptocurrency is stored and encrypted using codings so here no intermediators are needed for it’s safety. Also, normal money can be stored as black money but cryptocurrency is a decentralised and has transparency so no one can store it hidden. During financial crises inflation occurs which reduces the worth for normal money but cryptocurrency globalised one so it’s worth never descents.
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How cryptocurrency is works?w
The real creator of cryptocurrency is not verified. But as of now some theory says Bitcoin was the first crypto currency created and launched by group of programmers under the pseudonym Satoshi Nakamoto in 2009. It is created using a technique called Blockchain. And their safety is encrypted by coding. Also their scripts employs a stack-based architecture. Let’s see one by one clearly unaffected. Cryptocurrency is digital version of today’s paper money whose creation, storage, safety and manipulation was completely done digitally that is through coding. We can buy them from any cryptocurrency sellers. When we buy it, the amount of currency is transferred to us but don’t issue it to us. In network it’ll store the transaction that’s it. As it’s a global network and transparency your transaction is visible to every system that is connected to internet. So no fraud can happen. Here every transaction is cross-checked with the network and then currency is transferred. If you think you could change your currency numbers then the technology checks it with all the system connected in the network, if your command is not matched then request fails.
Let’s talk about the network which I mention above. Here the network is based on Blockchain technique which I have mentioned already. Let’s look into that topic. Let’s divide the term into Block and Chain. Look at the term block through database knowledge which we use to indicate the data. And chain is a term which denotes connection. Together we can say datum are connected like a chain. When a transaction made, the data involved in transaction is provided to all the connected systems implies your data is available globally in all systems. If you think you could change the data, the blockchain technology checks your request with all the connected systems where only your old transaction data is stored implies there occurs a mismatch thus your request was denied by blockchain technology. This is how the safety is provided.
You may have a question how the privacy is maintained as your data is visible to everyone? Not the real data is shared but the encrypted version of your data is shared. That is only sender’s address, recipient address, transaction amount and unique ids. Here encryption means sending the data by converting the data into a secret code. So no misuse can occurs. Also the data is stored using hashing technique.
Demerits of Cryptocurrency:
Types of cryptocurrency: