Cryptocurrency and Mining Coins | What is Cryptocurrency Cryptocurrency (or crypto currency) is a virtual/digital currency, works as a medium of exchange as an alternative currency to fiat currency. Cryptocurrencies are based on blockchain technology which is open distributed ledger. Examples are Bitcoin, Etherium etc. • Cryptocurrency uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. • Cryptocurrency uses decentralized control unlike banking system which is a centralized system. • 2008: Blockchain was invented by Satoshi Nakamoto for use in the cryptocurrency bitcoin, as its public transaction ledger. • 2009: Bitocin is the first decentralized cryptocurrency created. After bitcoin launch, many other Cryptocurrencies have been created which are called altcoins (alternative coins). • Altcoins are Litecoin, Etherium, Ripple etc. Jan Lansky definition – 6 conditions 1. Decentralized and distributed. 2. Control of Cryptocurrency units and their ownership. 3. System creates new Cryptocurrency units defining their origin and ownership of these new units. 4. Uses cryptography. 5. System allows transactions from sender to receiver. 6. System performs all authorized transactions. Banking system is centralized and governments or boards controls the supply of fiat currency or additions to digital banking ledgers. • Decentralized cryptocurrency is produced by the system as defined when it is created and governments or boards cannot produce new units. • Cryptocurrencies are designed to gradually decrease production, placing a cap on the amount of currency in circulation. Mining is validation of cryptocurrency transactions. • Miners receive new cryptocurrency as a reward. • Miners invest large sums of money on employing multiple high performance ASICs. Cryptocurrency wallet stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. • With the private key, write cryptocurrency spending in the public ledger. • With the public key, others can send currency to the wallet.
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