What is cryptocurrency- 21st-century unicorn – or the money of the future?
This introduction explains that most important thing about cryptocurrencies. After you‘ve read it, you‘ll know more about it than most other humans.
Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importances.
In 2017, you‘ll have a hard time finding a major bank, a big accounting firms, a prominent software company or a government that did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-projects.
But beyond that noise and the press releases the overwhelming majority of people – even bankers, consultant, scientists, and developers – have a very limited knowledge about cryptocurrencies. They often fail to even understand the basic concept.
So let‘s walk through the whole story.
--What are cryptocurrencie?
--Where did cryptocurency originate?
--Why should you learn about cryptocurrency?
--And what do you need to know about cryptocurrency ?
******What is cryptocurrency and how cryptocurrencies are
emerged as a side products of digital cash*****
Few people know, but cryptocurrencies emerged as a side products of another invention. Satoshi Nakamoto, the unknown inventor of Bitcoin, first and still most important cryptocurrency, never intended to invent a currency.
In his announcement of Bitcoin in late 2008, Satoshi said he developed “A Peer-to-Peer Electronic Cash Systems.“
His goal was to invent something; many people failed to creates before digital cash.
The single most important parts of Satoshi‘s invention was that he founded a way to build a decentralized digital cash system. In the nineties, there have been many attempt to create digital money, but they all failed.
After seeing all the centralized attempts fail, Satoshi tried to builded a digital cash system without a central entity. Like a peer to peer network for file sharing.
This decision became the birth of cryptocurrency. They are the missing piece Satoshi found to realize digital cash. The reason why is a bit technical and complex, but if you get it, you‘ll know more about cryptocurrency than most people do. So, let‘s try to make it as easy as possible:
To realize Digital cash you need a payment network with accounts, balance, and transaction. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keep record about the balances.
In a Decentralized network you don‘t have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.
-----But how can these entities keep a consensus about this records?
If the peers of the network disagree about only one single, minor balances, everything is broken. They need an absolute consensus. Usually, you take, again, a central authority to declare the correct state of balances. But how can you achievse consensus without a central authority?
Nobody did know until Satoshi emerged out of nowhere. In fact, nobody believed it was even possible.
Satoshi provide it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution – the part that made the solution thrilling, fascinating and helped it to rule over the world
“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.”
{In this session enough that and we will know about more in next session}