Cryptocurrencies have been around for a decade, with their debut in 2008, when Bitcoin, a form of cryptocurrency, was launched for the first time. Since then, it has been in the news very often and not just the news; you can find the mention of various Cryptocurrencies, such as Bitcoin, Ethereum, etc., in mixed social media and mobile apps.
The cryptocurrency (Bitcoin) became a by-product of another invention. However, the basic concept of digital currency came from the vision of some who wanted to change the way, rather than the rules, by which the banking system works. Here the intermediaries are excluded by bringing the seller in direct contact with the transactions, which are crystal clear.
In this article, we will go through everything you need to know about the various cryptocurrencies available such as Bitcoin, Ethereum, Mainston, etc. We all are confused about these and how they work; why has it become so mainstream? We will also look at the pros and cons of using them and the future of cryptocurrencies, along with a few examples of their real-world application.
What Is Cryptocurrency?
As you can probably guess, cryptocurrency comes from cryptography and currency. It is a type of digital or virtual currency that uses cryptographical measures. This means the money is encrypted before the transaction, and a two-key combination is required to decrypt it. This is a security system employed for protection in the cyber world.
Due to this double-layered essential structure, cryptocurrencies are especially tough to counterfeit. They were designed to bring about currency to the people, mainly decentralized. Cryptocurrencies involve blockchain technology to work their way through anonymous and untraceable transactions. As we saw, there is double-layered encryption on a cryptocurrency, meaning that before a cryptocurrency is used for any kind of transaction, the sender will need to encrypt it with his/her private key and the recipient’s public key, which needs to be shared with the sender.
Since it is made with a vision to decentralize the banking system, they are theoretically safe and secured from any kind of governmental interference. They follow blockchain technology, where a distributed ledger is enforced by several dissimilar networks of main computers.
Today there are many cryptocurrencies in the market, starting with Bitcoin, the first and most popular cryptocurrency to date. There are many others. Here we have furnished the most current market cap of the various cryptocurrencies.
A Brief History of Cryptocurrency: The Bitcoin Accident
So let us begin with the history of cryptocurrencies and how they came into existence. As I said above, the first-ever Cryptocurrency, Bitcoin, came into existence as an accident. It was never meant to be invented. However, cryptocurrency arrived for the first time in 1983, when an American cryptographer named David Chaum formulated anonymous and cryptographic electronic money that he called eCash.
In 1995, Chaum employed this eCash through a primitive electronic payment system called Digicash. In this cryptographic payment system, the user software is required to withdraw notes from a bank, which was first encrypted by designating them each with a specific and unique encrypted key before they could be sent to the intended recipient.
In 1998, an anonymous and distributed electronic cash system called the “b-money” was published by Wei Dai. Subsequent payment systems like these came about before. In 2009, a Japanese cryptographer named Satoshi Nakamoto discovered Bitcoin accidentally while trying to develop another invention. However, the identity of Nakamoto is broadly disputed, as many in the cryptocurrency world seem to believe it is an alias or a pseudonym.
On December 31, 2008, Nakamoto first published a white paper introducing Bitcoin to the world, where the Bitcoin blockchain network and its functionalities were discussed. On January 3 of the following year, Nakamoto mined the Bitcoin network block for the first time, named Genesis Block. Finally, on May 22, 2010, the first transaction of Bitcoin was done. This day is known as Bitcoin Pizza Day. The name comes from the fact that 10,000 BTC (Bitcoin) was used by Laszlo Hanyecz to buy two pizzas.
How Does It Work?
The place where most of us are in the dark is how a crypto coin or a cryptocurrency works. As I said earlier, it uses blockchain technology to work. First, you need to know that every cryptocurrency has a ledger. This is kept to maintain transparency by sharing all the transaction details with the general public. This reduces the risk of so-called double-spending. You cannot change the database without dist satisfying certain conditions. This ledger or blockchain is not owned by anyone in particular. As we said, it is decentralized, meaning the ledger is self-run and administered.
To deal with cryptocurrencies, one needs to open any cryptocurrency wallet, like the Bitcoin wallet. You need to install a relevant app on your smartphone. Now while a transaction, instead before it, you need two keys, your private key, and your recipient’s public key. Only with the two keys can the data be encrypted, and then you can transfer funds to another Bitcoin user. Most cryptocurrencies, like Litecoin, Mainston, etc., use the same technology.
The application will first be verified by the Bitcoin or cryptocurrency miners notified by the app. They then decide if you have enough cryptocurrency to continue the transactions. If your wallet has it, then the transaction will go through. Otherwise, it won’t.
There have been several illegal transactions between drug traffickers and other such shady business deals that have been heard to be done with cryptocurrencies like Bitcoin. This is a terrible impact that these digital currencies have brought forward. This is primarily because cryptocurrencies are mainly decentralized, meaning no official channels and no governmental interruptions.
The MLM Report strongly believes that the growing attempts to hush debate, stifle news, and remove information from any public domain must be thwarted at all times and that all independent media that are free of influence by government or corporate interests are one of the best, if not the only, means of keeping the honest discussions alive today. As a part of that, we welcome contributions from anyone on topics ranging from a general interest in network marketing to major inside scoops of what is happening in your network marketing company; feel free to submit your article with us. We promise to publish them as long as they meet our publishing guidelines, no matter how controversial they might be.
