Crypto Currency - What is It and How Does It Work? - Farah Atelier

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Sunday, July 14, 2019

Crypto Currency - What is It and How Does It Work?


Today, crypto currency has become a global phenomenon. It is known by most, but understood by few. This is now understandable as the product is technically advanced and nerdy. The reason we cover the topic is that it can increase your privacy, just like VPN, as it cannot be tracked as easily as government-regulated currency and we believe mass monitoring is wrong.

In 2019, you will find it difficult to find a large bank, large auditing firm or large software company that has not examined cryptographic currencies. The technology behind, blockchain, is useful in many other industries.
Crypto currency is also known by names as virtual currency and digital money, and is quite different from traditional FIAT (money as we know it - centralized and governed by authorities).

In this article, the key points within crypto currency will be uncovered:
·         Where does the crypto currency come from?

·         Why spend time exploring crypto currency?

·         What should I know about crypto?


How was crypto currency created?

Some know, but crypto currency was created as a side thing of an invention. The unknown person Satoshi Nakamoto behind Bitcoin. He is and will always be the most important person in the history of crypto currency. When he created Bitcoin, it was actually not the purpose of the project he was doing.

At the end of 2008, Satoshi announced Nakamoto Bitcoin.

 Peer-to-peer is a data network controlled by those who use the network

His goal was to create a digital currency. In addition, he was a freedom activist, so he chose to base Bitcoin on peer to peer. This creates decentralization, ie the users have power. There is no state or authoritarian impact on course, transaction or anything.

Bitcoin was the start of crypto currency. A bitcoin also cost only a few cents at the beginning, and has topped $ 19,000 per. PCS.

What is crypto currency?

The brief explanation is that crypto currency is a decentralized digital currency. But what does it really mean and how does it work?

Before we jump directly to it, there are three essential concepts one needs to understand.

Decentralized: In the crypto universe there is no central computer or server that controls the show. The controller is distributed on their network, mostly consisting of several thousand computers. These computers are powered by users.

Peer-to-peer: Crypto goes from person to person online. This process includes neither bank nor paypal. Both the bank and paypal will be third parties in a normal trade, but in crypto currency there are no third parties. Everything goes directly from user to user.

Mining:  The network crypto currency runs over called blockchain. Mining ensures the safety of this blockchain. People who mine validate transactions and store them on the blockchain and a transaction must be validated before it is executed. Therefore, the existence of blockchain is highly dependent on miners. For this reason, less a very small percentage of the transactions total value. This keeps the locomotive running. You can use cosmos validating services for crypto validation.

Common features of crypto currency

All crypto are different and have their own purpose, but most are identical on a fundamental level. Here you can see common features of most crypto currencies:

Irreversible

After you make a transaction and it's confirmed by the network, you can't get them back. The whole system is built to be one-way.

Anonymous

Everyone can create a wallet, it does not require personal data or any kind of documentation. Your wallet is just a line code where you can receive money.

Transmission of transactions globally and quickly

A transfer of money comes to the network immediately, then the transaction is confirmed. In principle, you can make a transaction to a user on the other side of the world, and the user wants the money within minutes.

Security as a focus area

Crypto usually use the latest and greatest encryption technology, which is why hacking is virtually impossible.

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