What is Cryptocurrency? The term Cryptocurrency is indeed not widely known and we believe many of the paralochos who searching this article out of curiosity with what is called the future money of the 21st century. Moreover, in 2017, with increased confidence and the proliferation of markets or cruptocurrency exchanges around the world seems to begin to show how the bright future of this revolutionary currency
- Well, let's start with understanding first
what's the Cryptocurrency?
- This is one of the most frequently asked questions out there. What does it mean and what's the point? Simply put, Cryptocurrency is a digital currency where transactions can be done in the network (online). Cryptocurrency is a medium just like the fiat money you trade everyday like the Rupiah, but is designed with special technology that is by exchanging digital information through a process called Cryptography.
Cryptocurrency is the first to attend and has achieved kesukseksan is Bitcoin, found by Satoshi Nakamoto. The success of Bitcoin is the initiator of the emergence of new types of Cryptocurrencies that try to compete with Bitcoin.
How Does Cryptocurrency Work?
The reason why Bitcoin is so desirable this time that the price continues to soar is because of a reason that its creator Satoshi Nakamoto has managed to find a revolutionary system that is a system that serves to facilitate decentralized digital money transactions. A decentralized money system is a network capable of connecting users without the need for intermediaries or third parties or central authorities such as banking or government. Only with devices like android or laptop connected to the internet, you can send and receive money from and to the world. Interestingly again, it can be done anytime and anywhere, regardless of the working day of the bank or government working days, no downtime and transactions can be done with a matter of minutes.
The problem we are facing in a centralized system is related to the need for more expenses to pay for third party services as an intermediary. In addition, the third party role now played by the bank or government must consist of a set of rules and certain restrictions, so it can be said is still far from efficiency and effectiveness.
The problem is what is tried to be solved by the technology that is now introduced by the name of Blockchain. The blockchain is the platform where Cryptocurrency digital currency is run. Cryptocurrency is a derived vocabulary of the word Cryptography or Cryptography (coding language), which means referring to an agreement of users and storage processes secured by strong codes.
The function of blockchain technology is to manage and maintain each addition of data stored on each block. The blocks that store the data will relate to each other and form a decentralized or peer to peer network (P2P) network. In blockchain, any data that has been stored or recorded can not be edited or falsified.
To simplify the understanding, this system enables you to send gold via email. P2P network is a network of agreements, therefore the system is able to present a system of payment and transaction processing that is really new and efficient in the form of digital money.
As an illustration, cryptocurrencies such as bitcoins consist of independent networks. Each of these self-contained networks has a complete record of the history of all transactions occurring as well as any balances owned by each Bitcoin owner account.
At the end of each transaction and after confirmation, a transaction will be instantly recognized by all networks connected to the blockchain network. A transaction will always contain an explanation that a transaction from A has provided Bitcoin to B and then digitally signed by A by providing a private key (in alphanumeric password) to the system. Once signed by A then the transaction will be automatically announced on the network. Such information is transmitted from one self-contained network to all other independent networks that are incorporated in the system.
Confirmation is the most crucial and critical stage in the cryptocurrency system. Confirmation is everything. When a transaction is not confirmed, it will be possible that the transaction is being hijacked or falsified.
When a transaction has been confirmed, the transaction will be stored in a place called "blocks". Notes about these transactions are inviolable, irreversible and can not be hijacked or falsified, they have been regarded as permanent records of the history of the whole transaction, these are called Blockchains or chain blocks.
Blockchain may be identified with a ledger (general ledger) available in the network or online, where every transaction is recorded and can be viewed by the entire Internet network users. Unlike banks, the Bank ledgers are kept and owned by the Bank itself, whereas in blockchain, even non-users can access the ledger. To provide an experimental dimension, paralocho can view the ledger in this link.
This series of processes actually indicates that Cryptocurrencies does not require humanity or trust between its users, simply by using security in the form of complex mathematical algorithms that promise security and impossibility to manipulate.
Then, who is responsible for confirming those transactions? The answer to this question is the "miners". This technology requires the miners to record each transaction, verify and disseminate information from a transaction to the network.
For each fully monitored and completed transaction, the miners will be rewarded with a small amount of bitcoin from the system.
Because miners play a very important role in this Cryptocurrency system, let us look at their task in detail.
What does the miner do?
First and most important is everyone can become a miner. Miners are needed because naturally in this decentralized network system does not have central authority to do the job assignment and on the other hand Cryptocurrency requires a system to prevent any form of cheating or misuse of the network. For example, a person may create thousands of independent networks (peers) and spread fake transactions, then it certainly can damage the system to the detriment of the crowd. It is for this reason that miners are made as if in collaboration with the road of confirming and verifying every record and transaction that occurs on the system, so that if anyone fabricates the transaction data or cheat, the system can know and punish directly, accurately and accurately accordingly with the mathematical logic of the system.
To become a miner, you need to solve a cryptological puzzle in the form of complicated mathematical problems that have been set up by Bitcoin creator Satoshi Nakamoto. If you manage to solve the puzzle, then as a miner you will be able to build a block and add it to the blockchain system. No need to fear, you must immediately be discouraged to hear math is not it? you just need a predetermined piece of software and hardware without the need to do the calculations manually. For more details related to mining we will discuss in the next learning series.
Miners are also given permission to add Cryptocurrency transactions into the system which will automatically assign some bitcoin to it. This is the only valid way to generate a "new" bitcoin. New bitcoins can only be generated from the process of a miner successfully solving the cryptological puzzles as described above. Mining difficulty levels will increase in line with the increasing need for electric power owned by the miners.
How to determine the price of a Cryptocurrency?
The price of a cryptocurrency is heavily dependent on the market mechanism, with so many cryptocurrencies present, the cryptocurrency market is a market that has a very rapid and extreme volatility and fluctuation, even within a few hours a Cryptocurrency can rise price up to 1000%, crazy!
The price of each digital currency is the same as the products in general, depending on demand and supply. If many people make requests for a particular currency while the penawarnnya not so much, then its value will increase. New units will be mined by miners to balance the situation. However, usually the digital currency in the market has been restricted to what the maximum amount can be mined.
Like Bitcoin for example, the total amount of bitcoin provided by the system is 21 million. Therefore, the supply of Bitcoin will decline over time and will touch its peak supply by 2140. This also explains why the value of Bitcoin is always higher when compared to other digital currencies.
Now, you must be wondering what the hell is that digital currency can be used? Okay, the cryptocurrencies you got can be used for some activities. For the moment there are only 3 transaction activities that you can do using Cryptocurrency that is:
- Bitcoin buying and selling in the Stock Market
- Personal Expenses
- Mass Fundraising or Crowdfunding.
First, buying and selling in the stock market.
This activity is very promising profits for professionals or for beginners. Because the bursary market can still be said as a new thing, where arbitration and margin trading are still possible to occur widely and often. Changing currency prices drastically play a very important role to bring in new investors into this market.
Compared to the conventional financial markets, the Cryptocurreny market can be said to be very barrier-free and very easy to join. You can directly register therein, exchange your fiat money for a number of bitcoins and you can start your own independent trading activities immediately. It should be underlined that bitcoin is not a fiat currency, which means the ups and downs of prices will not depend on or be influenced by the economy or the policies of a country.
In contrast to the conventional stock market in general, there is no official or official market for Bitcoin. Hundreds of Crypto markets are scattered all over the world that you can access 24x7. Due to the absence of an official market, it has the consequence of no official price for this digital currency.
Second, for personal expenses.
You can use bitcoin to buy any item, from buying a luxury car or going around the world.
In December 2013, a model Tesla S car was reportedly sold at 91.4 Bitcoin. The dealer is in California and continues to receive Bitcoin as a means of payment for the products in his store. In fact they said they had sold Lamborghini Gallardo unit at a price of 215.8 Bitcoin.
You can also go around the world using bitcoin, please follow this link www.cheapair.com. In November 2013 they have announced that they became the first travel agency to receive bitcoin.
Third, crowdfunding.
You have the opportunity to give something to the community by participating in mass fundraising or crowdfunding activities. You can be part of one's success story in building their dreams. Companies like Lighthouse have created crowdfunding platforms using bitcoins. The advantage of donating via bitcoin is that you will not be charged for doing so and the money you give will not be granted if the project you fund does not meet or reach the criteria. You can also withdraw the donation if it feels inconsistent with your original purpose of donating. The controls really are in your hands, paralochos!
Why Cryptocurrency?
because crypto will give the best for you guys..
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Nice post.
Thanks you for you sharing.
Wellcome bro
This post is very useful for us to grow. Thanks sir @syukur
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