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GYOnlineNG Money: Simple Understanding of Blockchain & Bitcoin That Everybody is Talking About?

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GYOnlineNG Money: Simple Understanding of Blockchain & Bitcoin That Everybody is Talking About?

I can’t even get a chance to surf internet the way I  used to surf it before or listing to radio without someone talking about Bitcoin. The Bitcoin boom in 2017, has change the narrative of how investors sees cryptocurrency and the future of digital money in coming years. As at the beginning of last year, Bitcoin kick-off the year at $700 but end the year with over $14,500 per one Bitcoin. Though, in the few months, many investors has profit from their investment in the digital money of Bitcoin, but some are still wondering what’s bitcoin.

Despite the booming increase in Bitcoin price in the last few months, many people are doubting the crptocurrency, but continue this post I will lend from the words of Warren Buffet where he says, to never invest in a business you don’t understand, I’d like to explain the concept to you without floundering into technical details, and leave you to make your investment decisions.

If you’re among the people who want to known what Bitcoin or crptocurrency stand for– Your wait is over because I explain in full details what all this things means:

What is a cryptocurrency?

Bitcoin is a cryptocurrency. There are thousands of other cryptocurrency that have been created since the creation of Bitcoin. The name cryptocurrency comes from the short form of the word “cryptography”, which is used to secure the transactions (similar to the technology used secure a purchase on Amazon or eBay) and the word “currency”.

Bitcoin Coin

GYOnlineNG Money: Simple Understanding of Blockchain & Bitcoin That Everybody is Talking About?

What is Blockchain?

Blockchain is a “digital ledger” that everyone has copy. If any transaction takes place, then it gets updated.

  • Everyone knows about it.* It’s decentralized. No company has ownership of it (so no single point of failure).
  • * Once the transaction has occurred it can’t be changed.* Transparency. Do you want to make a deal with someone and you’re not sure if they have the money? You can look up their address to see if they have as much money as they claim.

Di you get the point? If not here is simple understanding of what Blockchain means:

“You (a “node“) have a file of transactions on your computer (a “ledger”). Two government accountants (let’s call them “miners”) have the same file on theirs (so it’s “distributed”). As you make a transaction, your computer sends an e-mail to each accountant to inform them.

Each accountant rushes to be the first to check whether you can afford it (and be paid their salary “Bitcoins”). The first to check and validate hits “REPLY ALL”, attaching their logic for verifying the transaction (“Proof of Work”). If the other accountant agrees, everyone updates their file… “Blockchain” technology enables this concept. “

Bitcoin is just one currency that utilizes Blockchain.

It’s the most well-known and significant because it was the first, but there are a ton of other companies and coins using Blockchain beyond just being a currency.

What is Bitcoin?

Bitcoin is a virtual currency created in 2011 by an unknown person or people that went by the name Satoshi Nakamoto. Bitcoin was created in the rubble of the world financial crisis, where $16 trillion dollars was lost by greedy Wall Street bankers that only cared about enriching themselves. By using and holding Bitcoins, the average person will protect themselves from the next financial crisis created by Wall Street and profit from the explosive growth that Bitcoin has seen in the past 5 years.

Satoshi Nakamoto

Founder of Bitcoin Satoshi Nakamoto

What’s Difference Physical Currencies & Cryptocurrency

Digital money is limited in supply and it’s not controlled by any central bank or government. But control by individual that are using the Blockchain leger, cryptocurrencies use cryptography to secure transactions, control the creation of additional units and verify transfer of units.

In summary, the key features of a cryptocurrency are;

Unregulated – Cryptocurrencies are not issued by any central authority, rather they are based on peer-to-peer computer networks.

Limited Supply – With paper money, a government decides when to print and distribute money. With cryptocurrency, there is a limited and finite supply that can be mined. For instance, the puzzle associated with mining Bitcoin will result in a total release of Bitcoin of approximately 21 million units.

Anonymity – Neither transactions nor accounts are connected to real-world identities. Thus, it is almost impossible to connect the real-world identity of users with those addresses.

Secure – Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency.

Fast and global – Transactions are initiated almost instantly in the network and are readily confirmed in a couple of minutes.

Irreversible – After confirmation, a transaction cannot be reversed. This implies that there is no safety net.

How Does It Work?

I know by now you could have understand what Cryptocurrency means:

Unlike gold, cryptocurrency cannot merely be created arbitrarily. Gold should be mined out of the ground, while cryptocurrency should be mined via digital means. Cryptocurrencies are generated through a method called mining. Miners put their computers to figure validatory transactions within the peer-to-peer network. These users are referred to as Miners. Miners use special code to unravel maths issues and are issued an explicit units of a cryptocurrency in exchange. This creates AN incentive for a lot of folks to mine (anybody is a miner). Therefore, Mining may be a peer-to-peer laptop method accustomed secure and verify a cryptocurrency transactions and payments from one user to a different on a localized network. Mining involves adding the dealing knowledge from cryptocurrency to its international public ledger of past transactions, that is termed the blockchain. The blockchain is employed to tell apart legitimate transactions from makes an attempt to re-spend coins that have already been spent elsewhere.

How Does Cryptocurrencies Get Their Value?

Cryptocurrency gains its price from utility, as a lot of corporations and governments continue recognizing it as a way of payment or exchange. Also, strict capital controls in bound developing nations and interchange liquidity in bound countries like African nation and Republic of Zimbabwe supported the increase within the price of cryptocurrency as individuals obtain to create international payment and preserve disbursement power. whereas nobody is entirely positive however cryptocurrency can still unfold to the larger monetary world, it appears probably that a restricted provide of the currency and rising demand might cause costs to continue rising.

In the next post am going to write about how to create your own bitcoin wallet..

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