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What is cryptocurrency?

blockchain

CRYPTOCURRENCY

A cryptocurrency, crypto-currency, or crypto is a collection of binary data which is designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger which is 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.

Crypto algorithms are around in the computer domain since 1983 but the induction of hashing and development of blockchain came to the public around 2008 by Satoshi Nakamoto and after the publication of a research paper which was empathizing on proof of work algorithm, a new cryptocurrency came up named Bitcoin.

There are more than 6000 cryptocurrencies in existence today in 2021. The major chunk of them was developed in the last decade. Those are all working in different algorithms like proof of stake or proof of work, there are dozen more algorithms available over the internet!

What is Cryptocurrencies
According to Jan Lansky, a cryptocurrency is a system that meets six conditions

  1. The system does not require a Central Authority; its state is maintained through distributed consensus.
  2. The system keeps an overview of cryptocurrency units and their ownership.
  3. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  4. Ownership of cryptocurrency units can be proved exclusively cryptographically.
  5. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  6. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.

There are numerous things more which we need to understand to know more about the working of cryptocurrencies.

  1. Blockchain
  2. Nodes
  3. Time Stamping
  4. Mining
  5. Wallet
  6. Anonymity
  7. Transaction Fees
  8. Exchanges
  9. Automatic Swaps
  10. ATM’s
  11. Initial Coin Offering

You could find more information on all of these topics from the home page.

REFERENCES #

Wikipedia Contributors. “Cryptocurrency.” Wikipedia, Wikimedia Foundation, 15 Feb. 2019, en.wikipedia.org/wiki/Cryptocurrency.