Cryptocurrency and Blockchain technology
CRYPTOCURRENCY and BLOCKCHAIN
In short, we can say cryptocurrency is decentralized digital money and it is cryptographically safe. It is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
The DLT (distributed ledger technology) that most cryptocurrencies use is called blockchain technology. The first blockchain was designed by Satoshi Nakamoto for bitcoin. A blockchain is a linear chain of bocks.
No one knows who Satoshi Nakamoto is. It could be a man, a woman or even a group of people. Satoshi Nakamoto worked on bitcoin since probably 2007. In the coming year 2008, he published the paper (bitcoin). In January 2009 he released the code. By mid-210 his involvement diminished. He entrusted the project and a copy of alter key to GAVIN ANDRESEN who became his effective successor. He owns about 1M bitcoin which he never spent.
What is Cryptocurrency? How does a Blockchain work?
The concept of cryptocurrency was introduced to the world from the genesis of the Bitcoin in the USA, in the year 2009. Cryptocurrency is an unauthorized and invalidated form of currency. It was invented as a result of the failing banking system of the USA, which happened during the year 2008. The decrease in the value of Dollar caused an anonymous computer genius to come up with this concept of Bitcoins. Cryptocurrency is a digital entity used in the exchange for services and goods, just like the real money. The only difference is that it does not exist in physical form. It is encrypted, that is concealed through a machine code from the government and banking institutions. It does not require any central regulatory system; in this case, Federal Reserve, because it does not require any validation. It also enabled people to manufacture their own currency, which is this digital currency! It is apparently a wonder because the user or the consumer does not require permission and anonymity of the user is also maintained. The feature of cryptocurrency is dictated by the technique known as Blockchain. It is like a banking system of recording data, but only outside the government’s purview. The Blockchain is important as it is the cause behind the decentralization of the cryptocurrency transaction.
The decentralization is because this ‘banking system’ enables the accounts to be distributed globally, abolishing the need to contact anyone institute. This phenomenon is called distributed leisure; a type of platform where once we open a register of our account in one place, it opens on every such platform which is connected. This negates any necessity of a centralized system, or in other words, one platform as it is available on all platforms. Also if a claimant hasn’t received his due amount, he can reach out and ask for it; it works on a majority system. The Blockchain works on network trust where this trust upon the connectivity of said platforms is maintained. The anonymity feature is the most intriguing feature of cryptocurrency, where the privacy of the user’s identity is maintained. That is one can know the address of the sender or receiver of a particular transaction, but not the information that to whom does it belong.
Though cryptocurrency is not a legal entity it does have the potential of creating a parallel economy, only if the citizens of a country agree to use it as a mode of the system. It will not be accepted in banks but could be used for transactions, even if 50 percent of the population agrees to use it in that way, but it will fail the centralized economy and thus the economy of a nation.