What is Cryptocurrency: Everything You Need To Know [Ultimate Guide]

 

What is cryptocurrency and how cryptocurrencies emerged as a side product of digital cash

Some people know, but cryptocyria has emerged as a product of another invention. The first and still the most important cryptocurrent, Satoshi Nakamoto, unknown inventor of Bitukouin, was never to invent an exchange.

In his announcement of Bitcoin in late 2008, Satoshi said that he has developed "Peer-to-Peer Electronic Cash System".

His goal was to invent something; Many people failed to make digital cash before

To prevent double spending, announce the first release of BitToine, a new electronic cash system using peer-to-peer networks. It is not fully decentralized with any server or central authority - Satoshi Nakamoto, 09 January 2009, announcement of bitcoine on Sourceforage

The most important part of Satoshi's invention was that he found a way to create a decentralized digital cash system. In the nineties, many efforts were made to make digital money, but they all failed.

... More than a decade after failing in the trusted third party based system (Digitash, etc.), they see it as a lost cause. I hope they can distinguish it, for the first time I know it That we are trying a non-trust based system. - Datsin Tommel in an email to Satshi Nakamoto

After seeing all the centralized efforts, Satoshi tried to create a digital cash system without a central institution. Like a peer-to-peer network for file sharing

This decision became the birth of cryptocurrency. Those pieces disappeared, Satoshi realized the digital cash. The reason is a bit technical and complex, but if you get it, you will know more about cryptokurcture than most people. So, let's try to make as easy as possible:

To realize digital cash, you need a payment network with accounts, balance and transactions. It's easy to understand. One major problem is that to solve each payment network and to prevent the so-called double spending: one unit spends the same amount twice to stop it. Generally, this is done by a central server that keeps records about the balance.

In decentralized networks, you do not have this server. So you need every single unit in the network to do this work. Every colleague in the network needs a list with all the transactions so that the transaction is valid in the future or the effort to double the expenditure.

But how can these institutions keep consensus about this record?

If the network's colleagues disagree about only a single, minor balance, then everything is broken. They require a complete consensus Usually, again, you take a central authority to declare the exact balance of the balance. But how can you get consensus without the central authority?

Unless Satishi came out, nobody knew. In fact, nobody was also possible to believe

Satoshi proved that it was. Their main innovation was to get the consensus without the central authority. Cryptocooconxes are a part of this solution - this part has made the solution exciting, attractive and helped roll in around the world.