Cryptocurrencies
The world of crypto is completely different and in no way similar to the fiat. It runs on digital currencies. How are these currencies regulated? Are these controlled by political bodies? Are these centralized? How safe is it to have or store these? Well, you will find the answer as you read along.
What is the origin of the cryptocurrencies?
Back in the year 2009, Satoshi Nakomoto found a new type of currencies that were regulated by math. In the early days, all the efforts to create cryptos failed. In fact, Satoshi Nakomoto himself did not intend to create virtual money. All he did was try to find a decentralized cash system, just like a decentralized peer-to-peer file sharing system without a central authority.
This is an internet-based exchange medium where the transaction takes place on the blockchain ledger. This blockchain technology fuels its decentralization, transparency, and immutable nature.
One step further to understanding cryptocurrencies
It is significant to mention that the central authorities do not control the cryptos. I.e no regional, state, national or even international governing bodies can claim ownership of it. Therefore the people who hold cryptocurrencies aren’t answerable to the government (unless it is illegal in their region). To be even more precise, it is immune to the old ways of government’s control and interference.
The cryptos can be sent directly to the person concerned without depending on the money transfer mediums. This is possible with the private and public keys that each person holds. When the keys match the transaction takes place. This avoids the huge transaction fees levied by the companies.
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The double-spending issue
In a centralized monetary system, the single authority keeps track of all the transfers made. However, when it is a decentralized system, such a ledger is missing. So how do you manage the double-spending issue?
The nodes do it. Yes, the primary function of the nodes is to verify the transaction and make sure that the money is not spent twice. The nodes receive a certain reward for verifying it. When the bitcoin is spent, and the transaction takes place, the node that verifies the transaction sends message to the other nodes in the same block. Hence all the nodes now know which bitcoin was spent and which still remains unused.
What are the properties of cryptocurrencies?
Irreversible
Once a transaction is made, it is made. It cannot be reversed. If you have sent it to the wrong person, then end of the story. You can expect the transaction to be reversed at any cost. Not even the miners/ nodes who confirm the trade can do it.
No identities
Your real-world identity will not be connected to the cryptocurrencies. As said earlier, the transaction happens when the private and the public keys match. No Jack no Tom. Only a set of thirty characters.
Fast and global
In fiat, you need to pay a huge amount when converting one currency to another. It is not the same in cryptos. The fee is negligible. Having said that, the value of crypto is not too stable. It is highly volatile.
Want to create your cryptos?
Blockchain Firm is the right place for anyone who wants to develop cryptocurrencies and excel in the crypto race. They build flawless cryptos and provide end-to-end crypto service for all the domain.
