So, you decided that you want to learn what all the hype about bitcoin, cryptocurrency, and blockchains is about. The thing is this is nothing new, the technology and the concept of these things has been present for quite some time, but it has not become mainstream until recent years. Let’s get into the description of each. And every one of these terms and what they stand for and how they can be used in our everyday lives.
First, let’s explain what the blockchain is. A blockchain is a ledger that is decentralized. Which means that it’s the same as the banking system but without the bank as the mediator. When you want to trade something for another thing you need two things the money for the transaction and the item that is being bought for the money. If your money is on your credit card your bank receives a request to process the money transaction. And then it removes that amount from your card and puts it on the receiver’s bank account.
The blockchain is basically doing the same thing but without taking its cut, and without sharing any private information. For the blockchain to be productive all it needs is a network of computers. That will update all the ledgers at the same time with their computing power. This way only the sender and receiver know who is trading due to the change of the keys to open their ledgers. For the transaction, and the others just know that a transaction happened.
Next is the cryptocurrency, this is basically what a dollar is to the world. A form of monetary value transferred on a piece of paper, which is valid for the trading of goods and services in every aspect of our lives. Cryptocurrency is also a monetary value but not transferred to paper. It’s, in fact, a value in the online world where it can be traded for goods and services. Its protection is guaranteed by the cryptography and its value depends on the market. Which can change on any given day.
Last but not least is the bitcoin. The famous bitcoin is the first and the most well-known form of cryptocurrency that is at the same time the most valued. At certain points in time, a bitcoin was worth less than one dollar and today its worth several thousand dollars.
Bitcoin in a sense is the future of cryptocurrency and online financial transactions. It alone has paved the way for future coins and revolutionized the way we world can earn and trade with a new currency that is completely devout from the centralized banking system.
To understand how bitcoin works an in-depth analysis should be read as the intricate dealings. And inner working of the bitcoin is changing with every new generation of additional implementations. For now, bitcoin remains the largest and most mined coin on the cryptocurrency market.