Cryptocurrency - Basics

News Details

22 Sep 2019

Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions. Similar to how bank transaction work just we have no government or law which is followed through the transactions. Cryptocurrencies leverage blockchain technology to gain decentralization, transparency, and immutability.

The most important feature of a cryptocurrency is that it is not controlled by any central authority: the decentralized nature of the blockchain makes cryptocurrencies theoretically immune to the old ways of government control and interference. All data which is being processed is encrypted on the blockchain by the algorithm which is used.

Cryptocurrencies can be sent directly between two parties via the use of private and public keys.  These transfers can be done with minimal processing fees, allowing users to avoid the steep fees charged by traditional financial institutions. Those fees get divided among all devices which have processed the transaction. The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed.

As long as a transaction is unconfirmed, it is pending and can be forged. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it can‘t be reversed, it is part of an immutable record of historical transactions: of the so-called blockchain. The record is stored as the blockchain on all devices which are connected to the same network. All transactions can be traced back in some way.

Only miners can confirm transactions. This is their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.

Money is an invention. You can express yourself in whichever currency you like, as long as the other side is accepting it as relevant. Whoever you about money will talk in another currency around the globe, that doesn’t make any currency the main, it’s just a way to make a transaction possible. Exchanges do the wagering between currencies and are mostly government-issued.

Most will say gold is the main currency. That’s just the most accepted way of measuring wealth. Mining gold does just harm the planet. After mining it from the earth we do nothing with it, we just store it. We’re harming the earth for nothing. Or maybe we just like to pretend that we’re birds and we like shiny things, still, it’s not something we should do.