Blockchain and Cryptocurrency 101 1 Introduction to newbies

Blockchain and Cryptocurrency 101 2 What is a smart contract

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Bitcoin cannot be a viable, scalable alternative if it does not integrate. It can’t be the only alternative either, or it would be defeating its own purpose, because although bitcoin is decentralized, it can be centralized. Therefore, one of the most important lessons to learn from this bitcoin 101 section, is that the concept of bitcoin and decentralized cryptocurrency, is probably more valuable than bitcoin itself.
Bitcoin effectively opened the flood-gates through which a myriad of decentralized coins followed. Now there are many more alternatives to traditional currency, government and central bank control over the economy, and to the system that failed before. Bitcoin and other cryptocurrencies will help build a more robust system in which traditional currency holders will have a choice to hedge, in which people will no longer have to stack gold or other precious materials in their houses or in a vault to protect the value of what they earned. However, bitcoin and other cryptocurrencies are not yet ready to replace traditional currency, and might never be. That is another important lesson to learn from this bitcoin 101 section.

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It might sound like something a certain Italian plumber collects in between eating mushrooms, but Bitcoin is actually a hugely popular digital currency.
A digital currency is, as you might have guessed, a currency that is housed entirely online. No paper, no coins, no debit cards and, most importantly, no banks. Bitcoins can be used by anyone, anywhere – and you can even ‘mine them’ yourself – if you’ve got a computer big enough. Bitcoins don’t just represent a way to make a quick buck on the Internet though, they are becoming more and more commonplace in everyday life – and challenging people, companies and governments to reevaluate the way they trade money.
Originally worth less than one tenth of a cent, a single Bitcoin is now worth over $1,000. The volatility of the price of Bitcoins means they are widely open to speculation – in English, their value fluctuates on a daily, hourly, or even minute-by-minute basis. To help combat this, only a certain amount can be generated per hour. Bitcoin was created in 2009 by an anonymous online writer under the pseudonym Satoshi Nakamoto. He described the Bitcoin as a “peer to peer electronic cash system” and that is pretty much what it is. Although not the first crypto-currency ever created Bitcoin is probably the most widely used.
The more computer savvy can mine for their own Bitcoins by cracking a computer algorithm. Each cracked code is worth one Bitcoin. Simple. Well, not quite. Although the first Bitcoin algorithms were easy to crack, eight years later they’re far more difficult and require the most sophisticated computers. People now have whole server rooms dedicated to mining Bitcoins, and have formed syndicates to help pool their computers’ processing power together. This increasing difficulty helps to limit the amount of Bitcoins that are created, thus regulating their value.
But how can a digital coin that doesn’t physically exist be worth anything, let alone thousands of pounds? Matthew Tyler, CEO and founder of cyber-security firm Blackfoot, explains there’s nothing inherently valuable about inanimate objects such as a coin or paper notes.
He says: “If you think about it a £20 note has no intrinsic value – it’s not worth £20 pounds. It doesn’t cost £20 pounds to make it, but it is worth £20 because in the UK we have confidence in this piece of paper.” barriers they put in place.
But it’s not all as simple as that. Digital and crypto currencies still need some kind of guarantee to stop fraud and theft. Just as new £5 notes have over 20 security features to prevent counterfeiting, cryptocurrencies must also include safeguards to ensure they are secure. Enter blockchain.
A blockchain is a digital ledger – imagine a big, dusty book of transactions zapped into the 21st century and onto the internet and you’ve got blockchain. It’s a public record of all of the transactions that take place in a given network. Once a transaction is added to a blockchain it can’t be edited or deleted.big part in it.
Matt Tyler from Blackfoot recently gave a talk at the Lush Summit, on the potential of Bitcoin and blockchain