Every transaction between people is compromised by lack of trust. The Blockchain eliminates the need for trust. It is the trust protocol. The blockchain is a decentralised public ledger with private keys which eliminates the middleman. It is built with encryption in mind. It replaces the need for a trusted third party. For that reason, it is a threat to the traditional government and banking institutions because they have acted as the trusted third party for generations. The blockchain takes responsibility away from the banks and every organisation which has acted as a go-between when two parties enter into a transactional relationship. Governments are looking at ways to regulate the Blockchain. There are challenges with this. The Blockchain is decentralised. It has no point of vulnerability.
The future of human interaction is on the blockchain. The blockchain is the revolutionary technology which replaces the middleman as the guarantor of trust. The blockchain is the trust protocol. It is a public record of transactions of any kind with private keys for access. The network guarantees that the Information on the blockchain cannot be changed without the consent of the system. Nobody can change the records, and new entries are verified and added to existing files through consensus. If you buy a coffee using bitcoin, the history cannot be compromised; it is a permanent record. Many of the people who are asking questions about bitcoin have been told that there’s money to be made with bitcoin. It is true that some people have made money. But it is equally valid that others have lost, especially speculators who don’t understand how the bitcoin market behaves. Successful investors are in it for the long term. The value of bitcoin and other cryptocurrencies has been going up over the long run. For me, it’s not just about the bitcoin and cryptocurrencies, but it’s about the blockchain. The blockchain is the technology behind the bitcoin. It is also the technology behind all the cryptocurrencies and tokens. This language is jargon to many people, but it is the new jargon of money and value transfer and accounting. It is a protocol or a system of rules which eliminates the centralized nature of traditional institutions such as banks and governments. The blockchain puts decision
The mining of bitcoin is done to secure the bitcoin network. Securing the network means authenticating bitcoin transactions by consensus of the bitcoin miners. When you buy a cup of coffee using bitcoin, the transaction is broadcast to every bitcoin miner on the bitcoin network. The miners simultaneously start the process of authentication. The transaction is presented as a mathematical problem which must be solved to authenticate the coffee transaction. The miners compete to solve this problem. The miner who solves it first gets rewarded through bitcoin. Mining is one way of getting bitcoin. You can also get bitcoin by buying it or having someone send it to you. The miner who solves the problem First helps to validate the coffee buying transaction. Every transaction made using bitcoin is validated using this method. The process of mining uses up a lot of electricity and requires special computer hardware. The electricity bill for mining a single bitcoin could be as much as the bill for the entire month for a small household. Only 21 million bitcoin will ever be mined. The bitcoin mining process is designed so that it becomes increasingly more difficult to mine bitcoin as the 21 million figure is approached. The inherent difficulty is to mimic the scarcity property of a currency. If you have any questions please ask in the comments section. SaveSave
Altcoins are alternative cryptocurrencies to the bitcoin. The bitcoin has established itself as the first cryptocurrency and also the one that dominates the cryptocurrency market. There are other cryptocurrencies such as ethereum and litecoin. We now have more than seven hundred altcoins and the list is growing. Anyone can come up with their own cryptocurrency because they are all built on top of the same blockchain protocol. Having your own cryptocurrency on the blockchain is the same as having your own blog on the internet protocol. But who will use all these cryptocurrencies? It’s like asking, who will read all these blogs? The cryptocurrency which solves the most problems for the most people will take a bigger share of the market. With fiat currencies, you need certain currencies for certain transactions. For example, everyone needs US dollars for importing crude oil from oil-producing countries. People will need particular cryptocurrencies for specific transactions. The competition will push the most relevant altcoins to the top. Some will die a natural death just like some fiat currencies. Remember there are fiat currency wars so also cryptocurrency wars. So far bitcoin is leading the cryptocurrencies pack but the industry is evolving on a daily basis.
A crypto currency is an encrypted digital currency on a decentralised blockchain network. It exists only as a digital currency and has no physical counterpart. A crypto currency is generated as an incentive for validating transactions on a blockchain after consensus. Encryption is used to protect ownership of the crypto currency. It is also used to maintain trust.