If you are still sleeping on a bicycle you need to wake up from your slumber. Cryptocurrency has changed the dynamism of money there is no sitting on the fence. Rush now and key in to this phase of money. I will take you through the aisle of this wonderful opportunity that has presented itself without boundaries.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems
The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database
Blockchain technology backs up Bitcoin and other cryptocurrencies to this day, but there’s been a recent groundswell of interest from a variety of industries in making distributed ledger technology work, especially in business. Here’s a primer on what blockchain technology is, how it works, and where it is showing the most promise in business.
What is Blockchain
Blockchain is a technology that enables moving digital assets or coin from one individual to another. A blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity.
The real magic comes, however, from these digital ledger entries being distributed among a deployment or infrastructure. These additional nodes and layers in the infrastructure serve the purpose of providing a consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them.
How can blockchains be structured?
Blockchains can be configured to work in a number of ways that use different mechanisms to achieve consensus on transactions and, in particular, to define known participants in the chain and exclude everyone else. The largest example of blockchain in use, Bitcoin, employs an anonymous public ledger in which anyone can participate. For more private uses of blockchain among a smaller number of known actors, many organizations are deploying permissioned blockchains to control who participates in transaction activity.
What are the benefits of blockchains?
Blockchain is attractive to a number of different constituencies for a variety of reasons, including the following:
- The lack of a requirement for a central authority makes it an ideal ledger and settlement solution for joint ventures and affiliate relationships that are generally made on an equal or 50/50 footing without a provision for an arbitrator or manager. Indeed, having the computers verify transactions and settle them eliminates the need for clearinghouses and other settlement agents, providing disintermediation in a business arrangement and generally reducing costs while improving the speed at which transactions can be made, verified, settled, and recorded.
- The digital signatures and verifications make it difficult to envision a scenario wherein a bad actor could cause fraud and introduce problems that are costly to remove and resolve. The cryptographic integrity of the whole pending transaction, as well as examination by multiple nodes of the blockchain architecture, protect against threats and malevolent use of the technology. (It is important to note that this security protection has largely been untested in the marketplace and, while strong on a theoretical basis, questions remain about how well the protections will hold up in the reality of the digital economy we live in today.)
- The concept of blockchain works really well at tracking how assets move through a supply chain, through certain vendors and factories to transmission and transportation lines and into their final locations
In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network.
The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt. This arms race for cheaper-yet-efficient machines has been on since the day the first cryptocurrency, bitcoin, was introduced in 2009.
With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest large sums of money on employing multiple high performance ASICs.
Thus the value of the currency obtained for finding a hash often does not justify the amount of money spent on setting up the machines, the cooling facilities to overcome the enormous amount of heat they produce, and the electricity required to run them
A cryptocurrency wallet stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet.
Some of the major cryptocurrencies you have to consider outside Bitcoin
1 Litecoin (LTC)
2 Ethereum (ETH)
3 Zcash (ZEC)
4 Ripple (XRP)
5 Bitcoin Cash (BCH) etc.