History
Cryptocurrency has been attempted since 1998. Bitcoin was started by Satoshi Nakamoto, whose real identity or identities (many believe this is a group of people rather than a single person) remain unknown today. Bitcoin became publicly available in 2009. Initially, Bitcoins could only be gained from mining them. Mining Bitcoin (and other cryptocurrencies) is the process of making new Bitcoins by solving complex computation equations. This solving of the equations also makes the cryptocurrency payment network trustworthy and secure by verifying the transnational information.
All cryptocurrencies are finite, meaning there is a maximum number of them. This is to prevent inflation from entering the networks. For Bitcoins, that limit is 21,000,000 coins. At the current mining rate, this number will be reached in the year 2140.
How It Works
Define Cryptocurrency
A virtual currency is one wherein exchanges are checked, and records are kept up to date by a decentralized framework using cryptography to secure it, as opposed to a centralized authority. The use of cryptography makes it almost impossible to counterfeit. The decentralized framework is based on blockchain technology.
Define Cryptography
A secure means of communication that allows only the senders and intended recipients to read and understand the message.
Define Blockchain
The blockchain is a type of database, a collection of information stored electronically. This database comprises blocks, a collection of sets of information, and a specific storage capacity. When a block is filled, it is then chained to the previously filled block, forming a chain of blocks, thus the blockchain. The blockchain acts as a timeline of transactions or a ledger. The blocks are timestamped when added to the chain.
The transaction process works like this.
A transaction begins;
The transaction is sent to a network of computers all around the world;
The network of computers solves intricate equations that validate the transaction;
This transaction is then clustered with other validated transactions to form a block;
The block is then added to the blockchain, joining the blockchain’s timeline;
The transaction is complete.
How It Is Used
Although blockchain is most commonly used to store cryptocurrency, it has many other uses. Here are some of the current uses of the technology, and this list is constantly growing.
Sharing medical data
Cross-border payments
Personal identity security
Anti-money laundering tracking system
Supply chain and logistics monitoring
Voting mechanism
Intellectual property
Real estate processing
Retail loyalty programs
Data sharing and collaboration
Copyright and royalty protection
Security recording of legal documents
Refugee Aid
Statistic Transparency
Financing and Banking
Data privacy
Cross-Industry data consolidation
User Authentication
Human Resources
Replacing Passwords
E-Commerce
Smart Contracts
Paying Employees
Asset Management
Insurance Claims Processing
Smart Appliances
Passports
Birth, Wedding, and Death Certificates
Conclusion and Summary
Cryptography and blockchain are new, but this technology is here to stay. I’ve worked in technology for over 25 years now, and once technology has a foothold and is accepted by those in the industry, the concepts stay.
I am looking forward to the uses and what’s to come.
If you want to learn about the different types of cryptocurrencies, try Coinbase. Coinbase is free to create an account. Once you have an account, you get opportunities to learn about various cryptocurrencies and get paid. For example, you can learn about Ethereum and get paid between $3 to $7 or more in Ethereum for taking quizzes about what you’ve learned. I use it myself and have yet to put a penny in it. I’ve learned about 8 cryptocurrencies and hold some shares (or a portion of shares) of each I’ve learned about.
You can also buy, sell, and stake (earn interest off of) cryptocurrencies with the app. Check out the link here.
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