UNDERSTANDING CRYPTOCURRENCY AND BITCOIN.
Digital currency is any currency, money, or money-like asset that is primarily managed, stored, or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency. Digital currency may be recorded on a distributed database on the internet, a centralized electronic computer database owned by a company or bank, within digital files, or even on a stored-value card.
The following are the 10 largest trading cryptocurrencies by market capitalization.
- Binance coin
- USD coin
Cryptography is the practice and study of techniques for secure communication. More generally, cryptography is about constructing and analyzing protocols that prevent third parties or the public from reading private messages; various aspects in information security such as data confidentiality, data integrity, authentication, and non-repudiation are central to modern cryptography. Applications of cryptography include electronic commerce, chip-based payment cards, digital currencies, computer passwords, and military communications.
A cryptocurrency, crypto-currency is a binary data designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.
A distributed ledger is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. Unlike with a centralized database, there is no central administrator. A public ledger records all bitcoin transactions and copies are held on servers around the world. Anyone with a spare computer can set up one of these servers, known as a node. Consensus on who owns which coins is reached cryptographically across these nodes rather than relying on a central source of trust like a bank.
A blockchain is a growing list of records, called blocks, which are linked together using cryptography. It’s also described as a “trustless and fully decentralized peer-to-peer immutable data storage” that is spread over a network of participants often referred to as nodes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The timestamp proves that the transaction data existed when the block was published in order to get into its hash.
Bitcoin (₿) is a decentralized digital currency, without a central bank or single administrator, which can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. Transactions are recorded into a distributed, replicated public database known as the blockchain, with consensus achieved by a proof-of-work system called mining.
In the next article check out I will be informing you on the risks and benefits of investing in cryptocurrencies. I will also be advising you on the best platforms to use.