Crytocurrency:- Short Introduction

What is cryptocurrency? 

Cryptocurrency is an electronic money created with technology controlling its creation and protecting transactions, while hiding the identities of its users.

Crypto- is short for “cryptography”, and cryptography is computer technology used for security, hiding information, identities and more. Currency simply means “money currently in use”.

Cryptocurrencies are a digital cash designed to be quicker, cheaper and more reliable than our regular government issued money. Instead of trusting a government to create your money and banks to store, send and receive it, users transact directly with each other and store their money themselves. Because people can send money directly without a middleman, transactions are usually very affordable and fast.

What is bitcoin?

Bitcoin is the first digital cash created in 2009. It was made by an unknown person or group who went by the name, Satoshi Nakamoto.

Bitcoin is unique because it does not rely on government/bank created money. In addition, transactions occur directly between pseudonymous people (their real names are not known), meaning there are no banks or middlemen.

Each transaction is recorded on a digital record kept by many people across the world known as the “blockchain”. The data on the blockchain is publicly available and stored on many computers. Because there are so many copies being simultaneously maintained, the transaction and banking data is very safe and virtually impossible to manipulate.

What is blockchain?

Blockchain is technology for creating permanent, secure digital recordings that don’t rely on any single person or group. Blockchains can record any information, though the first example was created to record bitcoin transactions.

Imagine the blockchain as a book of records. Each page in that book, is a block, and can record anything. Blocks are created one after the other, chained to each other creating what we know as the blockchain.

What is a smart contract?

A smart contract mixes blockchain technology with contracts to make a more efficient and affordable system of doing business.

In a smart contract, two people doing business agree to exchange money for something else. if the requirements set by both parties of the contract are met on a date, it activates, delivering what was purchased. If the requirements are not met, the contract deactivates and returns whatever it was storing.

What is mining?

Mining is the computer process of recording and verifying information on the digital record known as the blockchain. Because mining requires computer power, people do this work in return for money. Each computer that fulfills this process can earn a reward in digital money and sometimes brand new, virgin coins.

Why they are giving us free tokens?

A nice way to think about this is using early telephone networks as an example. When the first telephone networks were developed, the phone companies used to give new customers phones and connect them to the network for free. When there were no other users on the network, the early adopters didn't get any utility from the phone. It was just a silent object which sat on their hallway table. Distributing the phones was just a cost, with no immediate benefit for the phone company. However, as the network started to grow, and people started to ring each other, the phones' utility started to increase, making ownership of the phone highly attractive and creating a virtuous circle which lead to almost 100% ownership amongst the public. 

What is An Initial Coin Offering?

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

With the success of Ethereum ICO are more and more used to fund the development of a crypto project by releasing token which is somehow integrated into the project. With this turn, ICO has become a tool that could revolutionize not just currency but the whole financial system. ICO token could become the securities and shares of tomorrow.