cryptocurrency

Cryptocurrencies are a digital asset – also considered as an alternative or virtual currency – that uses cryptography to secure transactions.

Cryptocurrency was decentralized by Bitcoin, afterwards, a number of other cryptocurrencies have been created, referred to as altcoins or bitcoin alternatives. Today, Bitcoin’s total value is close to $9 billion. Instead of going with the traditional centralized electronic money or centralized banking systems, Bitcoin and alternatives use decentralized control. It makes use of bitcoin’s blockchain transaction database as a distributed ledger.

The blockchain solution is an innovation in technology. The blocks are a continuously growing list of records, linked and secured by cryptography. Each ‘block’ typically contains a timestamp and transaction data.

In its development phase, it was intended for the digital currency. Now, it has more potential use in technology and finance. It also presents an opportunity to consolidate and even standardize financial markets all over the globe.

The blockchain solution and cryptocurrency have the potential to solve the looming and already present problems of the global financial system.

With the development of blockchain solution, coupled with widespread integration into both public and private sectors and the high yield of cryptocurrencies – we are looking at the answer to the scarce funding of long-term investment.

A blockchain is a digitized, decentralized, public type of distributed ledger of all cryptocurrency transactions that is shared among a distributed network of computers. It is composed of a series of records, also known as blocks, which are connected and linked using cryptography to allow participants on the network to record transactions on the ledger in a secure way and without the need of an approval from a third party.

To make it simple, bitcoin technology works in such a way that a network of computers keeps a record of all the transactions made by internet users who transfer a unique piece of digital property or currency to another internet user, wherein the transfer is guaranteed to be safe and secure, everyone is aware about the transfer, and modification is not allowed.

As a distributed ledger, a blockchain is usually managed by a peer-to-peer network altogether complying to an agreement for verifying new blocks.

Blockchains are designed to be secure as it is a distributed computing system with high Byzantine fault tolerance, the capability of a computer system to resist failure from faulty components from reaching a necessary consensus. Because of this, blockchain has achieved a decentralized consensus which makes it suitable for recording data such as medical records and events and other records management activities. Part of its security methods is using public-key cryptography wherein value tokens that are sent across the network are documented as belonging to the public key, an address on the blockchain that is composed of a long string of numbers. When a blockchain is divided into two separate chains as a consequence of using two distinct sets of rules to govern the system, the situation is known as a hard fork.

Open blockchains are more user-friendly and convenient to use compared to traditional ownership records but they still require physical access to view. A permissionless, open, or public blockchain network does not require access control which means that new applications can be added to the network without any approval using blockchain as a transport layer. Cryptocurrencies such as bitcoin secure their blockchain by requiring new entries to include a proof of work. Although early blockchains were permissionless, permission or private blockchains who use access control over who gets access to the network are now existing.

Bitcoin is a digital currency and a payment system which works without having an administrator or a central repository. The system is peer-to-peer and the transactions take place directly between users without having any middlemen involved. The transactions are recorded in a public ledger called the blockchain.

Bitcoins are created as a reward for mining. Bitcoins are virtual coins that possess value without the need for banks to move and store the money.

Bitcoins are widely accepted as a currency in many countries and is in fact the most widely accepted cryptocurrency in the world.Bitcoin constantly trades on exchanges worldwide in a straightforward and very quick manner and is conveniently stored electronically in cryptocurrency wallets. Bitcoin uses public-key cryptography where public and private cryptographic keys are generated.

In 2016, bitcoin has become more stable than gold and in 2017, the price of a bitcoin exceeds the price of an ounce of gold. The value of bitcoin network with regards to the price of bitcoins is proportional to the number of unique users in the network.

The future of Bitcoin is still in question because it is still unregulated and governments are distressed about the taxation and not having any control over the currency. Bitcoin possesses potential security breaches or threats that make people skeptical about it.