Understanding Cryptocurrency

Understanding Cryptocurrency, Bitcoin & Alt Coins!

Cryptocurrency is not hard to understand when you understand the technology that underlies it. The blockchain is the basis of everything. Once you understand it, you will be able to make sense of everything that happens. Yes, we have Bitcoin but we have other coins too.

They may not have as large a market share as Bitcoin but they do have their uses and fans. Altcoins provide a different way of doing things sometimes. Other times they are just exact replicas of the originals and other times they may be worse than the ones we are used to.

Blockchain’s goal has always been to allow recording of digital information that is distributable but immutable. Without seeing the tech in action, it becomes hard to visualize it.

In 1991, Stuart Haber and W. Scott Stornetta researched on a system that could give documents timestamps that no one could tamper with, once they were assigned. It would be two decades later before the first real-world application hit the market.

Let’s take Bitcoin as a sample to understand what cryptocurrencies are like;

The Bitcoin protocol is built on the Blockchain.

Here is how it works;

•  There are people all over the world who have Bitcoin. According to a 2019 study by the Cambridge Center for Alternative Finance, the number was as high as 5.9 million people.
•  Let’s assume that one of these people wants to spend the money buying food. That is where blockchain comes into the picture.

Printed money falls under regulation by a central authority (Central Banks and Governments). Bitcoin is not controlled by anyone. All transactions are verified by the network of computers instead of one person or body.

We will talk about how altcoins are sometimes more useful than the one that started it all. In the case of Ethereum, there is an option for developers to build their apps and use them for other functions that benefit from the immutable and decentralized nature of the blockchain.