Cryptocurrencies and Blockchains are the next evolution for money.
If your new to Steemit and the cryptocurrency community, you have probably been seeing a lot of weird terminology including blockchains and cryptocurrencies. In this post I will be giving you an explanation of what blockchains and cryptocurrencies are in a easy way to understand.
First off, let's start off with a blockchain
What is a blockchain?
Definition: blockchain is a public ledger of all Bitcoin transactions that have ever been executed. It is constantly growing as 'completed' blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order.
In simpler terms, (the way I was presented to a blockchain) look at a blockchain like a giant notebook where everybody on the planet can write in and see it but cannot be changed.
What is a blockchain useful for?
•Sending notes from one place to another.
•Making transactions.
What's cool about a blockchain is that no one can interfere with it, sensor it, and even regulate it, including the government!
How does a blockchain work?
For example, a Bitcoin network is a decentralized network. Every time a transaction occurs between the members of this network, it needs to be verified so to ensure that every transaction occurring within the network is between two individual accounts and that there is no risk of double spending. This process of verification is carried out by some members of the network called miners. The miners use specialized and easily available software along with the processing power of their computers to verify the transactions. This sounds simple enough, but the processing power required to do so is hard indeed. Also since the miners are using their bandwidth and electricity to do the verification process, they need to be compensated.
All these social networks like Steemit, Yours, DECENT, and AKASHA are all on a blockchains Steemit is on an independent blockchain. Steemit has there own cryptocurrency (STEEM) and rewards its user's in it.
Yours, when it releases will be on the bitcoin blockchain and will reward its user's bitcoin!
DECENT, when released will be on a independent blockchain and have its own **cryptocurrency ** called the DECENT token.
AKASHA, when released will be on the Ethereum blockchain and will reward its user's with Etherum!
Now, lets talk about cryptocurrencies.
Vocab:
Ledgers: All confirmed transactions from the start of a cryptocurrency’s creation are stored in a public ledger. The identities of the coin owners are encrypted, and the system uses other cryptographic techniques to ensure the legitimacy of record keeping. The ledger ensures that corresponding “digital wallets” can calculate an accurate spendable balance. Also, new transactions can be checked to ensure that each transaction uses only coins currently owned by the spender. Bitcoin calls this public ledger the transaction blockchain.
Transactions: A transfer of funds between two digital wallets is called a transaction. That transaction gets submitted to a public ledger and awaits confirmation. When a transaction is made, wallets use an encrypted electronic signature (an encrypted piece of data called a cryptographic signature) to provide a mathematical proof that the transaction is coming from the owner of the wallet. The confirmation process takes a bit of time (ten minutes for bitcoin) while “miners” mine (ie. confirm transactions and add them to the public ledger).
What are cryptocurrencies?
Definition: a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
As we all know, the U.S. Dollar is in its final stages. With that being said, when the dollar loose's its value, what will be the new currency? I believe that cryptocurrencies will be taking the U.S. Dollar spot and here is why.
How do cryptocurrencies work?
Cryptocurrencies do not have anything backing it up like the U.S. dollar for instince is Gold.
Cryptocurrencies are just people's belief that these numbers are worth something. It's a system that prevents unfair changes.
Let's use Bitcoin as an example: Bitcoin let's people exchange money electronically user 2 user like a text message or an email. To send the money you use what's called a digital wallet app to type in the amount of Bitcoin you would like to send then you send it to their wallet address. (everyone has a unique wallet address) When you press the send button, your wallet sends a transaction message to the bitcoin network describing how the ledger should change including the sender's and the recipient's account details and the amount. With this being said, how do you prevent a thief you might ask? Bitcoin require a signature sort of like a you write a signature on a check but on bitcoin its a code of numbers instead of a handwritten signature to prove it was created by the true account owner. The signatures are unique to each transaction so it can never be used again!
It's difficult to commit fraud because:
•You can’t spend someone else's Bitcoin, because everyone knows who owns them (from the ledger.)
•You can’t spend the same coin twice, because the network keeps the ledger up to date and there’s only one ledger. If you did try to spend it twice, everyone would know.
•You can’t fake the currency, because to create a bitcoin you need to break a nearly impossible math problem. A new problem is set every 10 minutes, and the winner gets a brand new bitcoin as a 'prize'. There’s no way to fake the answer – you’re either right or you’re not, so there’s no way to fake a bitcoin.
What are the Best Cryptocurrencies?
Bitcoin is the first cryptocurrency to successfully prove the viability of a cryptographic-backed public money supply that is open to anyone. From a market capitalization point of view, bitcoin is currently the most popular cryptocurrency. However, there are close to 750 different types of cryptocurrencies currently available on coin exchange market, the most popular place to discover and track cryptocurrency prices. Among the many choices available, differentcryptocurrencies provide different benefits over others. The best **cryptocurrency ** is the one that fits your specific need that you intend to use it for.
Where to buy and trade cryptocurrencies?
The 2 main place's to buy and trade cryptocurrenciesare:
Coinbase - Ethereum and Bitcoin
Poloniex - Almost every cryptocurrency you can think of.
Conclusion
In conclusion, I hope after reading this you can better understand cryptocurrencies and blockchains better! Let me know in the comment section if it helped you! Thanks guys!
Until Next Time
@dantheman @berniesanders @ned @blocktrades @tombstone and any other whales
Let me know your thoughts on this please!
Very well written, congratulation. I bet you've invested lots of time and effort into researching and writing the article.
You did great. Keep on doing the good work. Good luck!
I am following you ;)
Thanks ervin!
Hey love your piece of writing. Youth like you certainly able to change the world one step at a time. Continue to inspire others to join in the revolution!
Thank you so much raj, it's greatly appreciated!
Damn I wish my shitty vote would make you more money. Great work!
Thanks cattyboy! I know it sucks I think I posted good content at the wrong time :( Shouldve posted it in the morning
lol...our youth can teach thease older peeps some great thing easily. This helped me appreciate the time you took for it. I have been familir with the first Crypt- the biotcoin. But this helps me see thenvast niche it is. Im pretty escited for Steemit...keep sharing!
thanks man! appreciate it! me as well! steemit is going to be great in the future!
@thephrophet0! You're awesome thanks for contributing this great information! This is part of the next big wave of technology that "makes over the world" and makes our entire system more efficient!
without a doubt! I am ahead of 99% of 15 year old's and I am glad I am investing my money into crypto..
@thephrophet0 that's great news for the rest of us! Sharing your knowledge and talents with us is greatly appreciated!
:)
Thanks man!
@theprophet0 Its great to see the youth dropping science on the older folks over here. Great info and keep it up. Since your'e in school it would be cool to do your school projects on crypto and then post your research here for the steemit community to learn from. It would be a win win for all.
Great Idea! I might do that! Thanks man!
Word.