Overview of Cryptography Cryptocurrency and Bitcoin Tutorial
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What is Bitcoin and cryptocurrency
hello world ,welcome to the cryptocurrency secret model , I think many of you are curious of this so called 21st century money of the future.
Congratulations ,because you come to the right place and I will help you to taking action by going through this course as the future of cryptocurrency looks bright ahead.
This course is broken down into many different chapters which explains the important facts as well as the tricks of the trade , that you need to know about this digital currency.
I promise by the end of the course , you know more about cryptocurrency , this means you will be ready for kick start on cryptocurrency portfolio .
- What is cryptocurrency ?
- How do cryptocurrency work ?
- How are the value of cryptocurrencies determined ?
- What is cryptocurrency used for ?
- Why cryptocurrency ?
What is cryptocurrency ?
This is one of the most frequently asked question out there “what is cryptocurrency ?”.
To make it simple , Cryptocurrency is a digital version of money where the transactions are done online. A cryptocurrency is a medium of exchange just like your normal everyday currencies such as US Dollars ,Rupees but designed for the purpose of exchanging digital information through a process known as Cryptography.
The first ever-successful cryptocurrency emerged form the inventions of Bitcoins by Satoshi Nakamoto.
This was then followed by birth of other types of cryptocurrencies competing against the Bitcoin.
How do cryptocurrencies work ?
The reason why cryptocurrencies are in such demand right now because Satoshi Natamoko successfully found a way the decentralized digital cash system.
What is decentralized cash system ?
A decentralized cash systems means the network is powered by its users without having any third party, central authority or middleman controlling it. Neither the central bank nor the government have power over the system.
The problem with the centralized network in a payment system is the so called Double spending .
Double spending happens when one entity spends the same amount twice.for example when you purchase things online you have to pay unnecessary expensive transaction fees , usually this is done by a central server , they keeps track of your balances, this is most commonly known as the Blockchain Technology.
Cryptocurrency is derived from the word cryptography . which refers to the condenses keeping process secured by strong cryptography. Blockchain technology functions in managing and maintaining a growing set of data blocks and this is by using the decentralized or known as P2P (peer to peer)network.
In Blockchain once a piece of data is recorded , it can not be edited or changed .
To put it in simpler terms , it enables you to send a gold coin via email.The P2P network is a consenses network which allows a new payment system and the transactions of new digital money.
A cryptocurrency like Bitcoin consists of its own network of peers. Every peer has a record of the complete history of all transactions as well as the balance of every account.
A transaction includes a process where “A” gives X amount of Bitcoins to “B”and signed by A`s private key after signed the transaction is broadcast to the network, the information is send from one peer to every other peer on a network.
Confirmation is a critical stage in cryptocurrency system.confirmation is everything, when the transaction is not confirmed, it has the possibility of being hacked in forge When the transaction is confirmed , it can not be reversed,and its impossible to be hacked and its not forcible as it is a part of permanent record of the historical transaction.
The blockchain can be like in to an online ledger where all transactions are recorded and visible to the whole network. This comes to show that cryptocurrencies are not secured by people or trust , but by complex mathematical equations.
It is very secured, and only miners are able to confirm a transaction ,this is the rule in cryptocurrency network ,they record transactions , verify them and disperse the transaction information in the network. For every completed transaction monitered and fascilated by the miners, they are rewarded with the tokens of cryptocurrency for instance with bitcoins . Since miners play a major roles in a cryptocurrency system , Lets look at their role in more details
What are miners ?
Miners are needed because of the nature of the decentralized network where they have no authority to delegate tasks and the cryptocurrency needs some kinds of system to prevent any form of network abuse.
Anyone can be a miner.
For instance,a person may create thousands of peers and spread forge transactions , it will disrupt the system immediately.
If you be a miner,you would need to solve a cryptologic puzzle which is a set of very complex mathematical questions set by Satoshi Nakamoto himself. If you successfully solve the puzzle as a miner,you can added to the blockchain.
The miner is also given permission to add a cryptocurrency transaction to the system which automatically grants him a specific number of bitcoins. This is the only way to create valid bitcoins,bitcoins can only be generated if a miner can solve a cryptographic puzzle, the level of difficulty increases with the amount of computer power of the miner invests.
How are the cryptocurrencies value determined ?
The value of cryptocurrencies dependent on the market ,whether price of various cryptocurrencies vary a lot, and this is one of the most fluctuating markets today.
The of cryptocurrencies like any other product is dependent on the demand and supply, if more people demand a particular currencies then the value increases, more units are mined by miners to balance the flow ,however most currencies limits the supply of tokens,for instance the total amount of Bitcoin is 21 million only therefore Bitcoins supply will decreases in time and will reach its final number.
What is Cryptocurrencies used for ?
There are 3 different transactions that can be performed by using cryptocurrency. All transactions are completed online .
- Bitcoin Trading
- Personel spending
- Crowd funding
Bitcoin trading can be very profitable for both professionals and beginners. The market is new, where arbitrage and margin trading is widely available. The high value of currencies also play a major role in bringing new investors to the trading market.
Compared to other financial currencies, Bitcoin has very little barrier to entry. If you already own Bitcoin, no verification is required and you can start trading almost instantly.
The price of Bitcoin is not related to the economy and policies of any single country and unlike stock market there is no official bitcoin exchanges instead hundreds of bitcoins exchanges 24*7 around the world , where currency is known as its rapid and frequent price movement.
You can use Bitcoin to purchase almost anything , from buying cars to travelling across the world.
- In December 2013, a Tesla model S was purchased for a reported 91.4 bitcoins. The dealer located in California continues to accept Bitcoins as a means of payment. They have since manged to sell Lamborghini Gallardo for 216.8 bitcoin.
- You can also travel the world using bitcoins, just head to www.cheapair.com .
- On the 22nd of november 2013 , they announce that they were be the first online travel agencies accepting bitcoins. You are able to purchase flight, hotel ,car rentals etc. you can even book the whole package.
Cryptocurrency also provides the chance for you to give back to society by crowd funding. You are able to be a part of someone success story by donating to crypto crowd funding project.
Company such as lighthouse have built their crowd funding platform using bitcoin. So , the perks of donating through this system are you will not be charged for your donation and funds will not be released unless the project meets the criteria.
You are aso able to withdraw from the campaign before its completion . you have complete control over the donation.
Why Cryptocurrency ?
Apart from cryptocurrency being very secure and it is run through a decentralized network . there are other properties which projects why cryptocurrencies , may be the most talkable topic contain.
It also been considered as potentially an investment which gives a massive returns.
- Erik finman is a teenage bitcoin millionaire who started picking up bitcoin as only $12 a piece back in May 2011 when he was just 12 years old. He received the bitcoin as a tip from his brother and $1000 gift from his grandmother. Now he reportedly 403 Bitcoin which hold the value of roughly 2600 dollars, where it is accumulated to a stash of 1.08 million dollar inchange.
Why should you invest in Cryptocurrency ?
There are various concrete reason why you should invest in cryptocurrency, some of them are mentioned below :-
- The cryptocurrency transaction is fast and global.
- Transactions are propagated immediately in the network and is confirmed within minutes. Since the transactions are manged by global networks of computers, they do not need your physical location. You can send your cryptocurrency to someone near you or even they are living on the other side of the world .
- The currencies are in controlled supply thus there is a high chance that the value of the currencies appreciate over time.
- You have more control of what is going on in your account and how the system works and operate. This is due to the decentralized network of peers which keeps a consenses on account balances and the transactions made , compare this to physical bank account which can be changed and controlled by people you don`t see and govern by rules you don`t even know exits.