This post will help you to understand What is Cryptocurrency and also Cryptocurrency explained from a converstation of two friends.
Cryptocurrency Explained – Tutorial for Beginners
Assume you’re in the middle of a conversation with your friends. Someone is going to bring up Crypto Currencies at some point during the talk. Now, everyone wants to talk about crypto currencies, but no one truly understands how they work.
World currencies have been an integral element of our lives since man’s evolution. In the cave man era, the barter system was used. The Barter System now entails the exchange of commodities and services between individuals. As a result, we now have a situation in which a caveman trades seven apples for oranges.
Because of its faults, the Barter System has now fallen out of favour.
Now, one of these problems is that people’s needs must all be met at the same time. For example, Let’s say you have 5 apples and your friend has 5 oranges. Now you want some of his oranges.
Until or unless your friend has a requirement for the apples that you own. he wont be ready to make an exchange for it. There is no universal metric for valuing something. Now since there is no common measure in terms of which value of a commodity can be expressed.
There’s a problem when you have to decide how many apples you are ready to trade for 1 orange or a mango, not all goods can be divided or subdivided. A live animal, for example, cannot be divided into smaller units. As a result, the commodities are difficult to transport.
Now Unlike our modern currency, which fits in your wallet or on your phone, the commodities you own cannot be carried around with you at all times. The barter system didn’t work very well after that realisation. Currency went through iterations.
In 110 BC, An official currency was minted in 1250 AD gold plated, Florence was introduced and this was used across Europe and from 1680 to 1980 AD,, Paper currency gained widespread popularity and was used across the world.
This is how modern currency came into existence as we know it. Paper money and coins, as well as credit cards and digital wallets, were all examples of modern currency.
For example, We have Apple Pay, Amazon pay, PayTM, PayPal and so on. All of this are controlled by banks and governments. Now this this means that there was a centralized regulatory authority the delimited help paper currency and credit cards worked.
Consider the following scenario: you’re making an online purchase. Here you are thanking your friends for paying for your lunch. Are you saying that you’re sending the money to their account. Now this transaction takes place successfully but there are several ways that this could have gone wrong. They could have been a technical issue at the bank.
For example, the system could have been down, the machines were not working properly and so on, that means there’s a central point of failure which is the bank. The user’s accounts could have gotten hacked. For example there could have been DDos Attack or Identity theft and so on or transfer limits for that account exceeded. This is why Cryptocurrency is the currency of the future.
Consider a future transaction between two persons. One of them has the Bitcoin app, and a notification appears asking if they are prepared to send 5 Bitcoins. If the answer is affirmative, processing begins. Here, we’re verifying the user’s identification, as well as determining whether they have the necessary balance to complete the transaction.
After that, the payment is transmitted, and the payment is received; everything happens in a matter of minutes, and it’s that simple. As a result, all of the problems associated with modern banking are eliminated: there are no limits to the amount of money you can send, your accounts cannot be hacked, and there is no single point of failure.
Now as of 2018, there’s more than 1600 Cryptocurrency are available, but there are some popular ones like Bitcoin, LiteCoin, Its Harry modifies each currency, such as Bitcoin and LiteCoin, and a new Cryptocurrency emerges every day.
Given how much growth they’re experiencing right now, there’s a strong likelihood there’ll be lots more in the coming years. So, what is Cryptocurrency exactly?
What Is Cryptocurrency and How Does It Work?
Cryptocurrency is a type of digital or virtual currency used as a means of exchange. Cryptocurrency is now quite comparable to real-world currency, with the exception that it does not have a physical form. Its operation is likewise based on cryptography.
Hope you have got an idea What is Cryptocurrency through this post and Cryptocurrency Explained – Cryptocurrency Tutorial for Beginners.
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