Cryptocurrencies are digital assets that were created to work as a means of exchange for goods and services just like money. All your digital assets are stored in a wallet using a very strong cryptography which also helps keep record of all your transactions.
Some Cryptocurrencies are decentralized ( meaning you have total access over your digital assets especially all your data) unlike conventional banking systems were you don’t have total control.
When a cryptocurrency is minted or created prior to issuance or held on a centralized exchange, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
There are lots of Cryptocurrencies out there like Ethreum, Bitcoin, Litecoin, TATcoin, BTC cash, stellar and so on and it keeps counting everyday.
But we would be talking about the most used and preferred one which is Bitcoin. Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas set out in a whitepaper by Satoshi Nakamoto. The identity of the person or persons who created the technology is still a mystery.
Understanding Bitcoin
Bitcoin is a collection of computers, or nodes, that all run Bitcoin’s code and store its blockchain. A blockchain can be thought of as a collection of blocks. In each block is a collection of transactions. Because all these computers running the blockchain have the same list of blocks and transactions and can transparently see these new blocks being filled with new Bitcoin transactions, no one can cheat the system. Anyone, whether they run a Bitcoin “node” or not, can see these transactions occurring live. In order to achieve a nefarious act, a bad actor would need to operate 51% of the computing power that makes up Bitcoin. Bitcoin currently has over 10,000 nodes and this number is growing, making such an attack quite unlikely.
In the event that an attack was to happen, the Bitcoin nodes, or the people who take part in the Bitcoin network with their computer, would likely fork to a new blockchain making the effort the bad actor put forth to achieve the attack a waste.
Bitcoin is a type of cryptocurrency. Balances of Bitcoin tokens are kept using public and private “keys,” which are long strings of numbers and letters linked through mathematical encryption algorithms that was used to create them. The public key can be(comparable to a bank account number) serves as the address which is published to the world and to which others may send bitcoins. The private key (comparable to an ATM PIN) is meant to be a guarded secret and only used to authorize Bitcoin transmissions. Bitcoin keys should not be confused with a Bitcoin wallet, which is a physical or digital device which facilitates the trading of Bitcoin and allows users to track ownership of coins. Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, are comprised of nodes or miners. “Miners,” or the people who process the transactions on the blockchain, are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network.
Bitcoin mining is the process by which bitcoins are released into circulation. Generally, mining requires the solving of computationally difficult puzzles in order to discover a new block, which is added to the blockchain. In contributing to the blockchain, mining adds and verifies transaction records across the network. For adding blocks to the blockchain, miners receive a reward in the form of a few bitcoins; the reward is halved every 210,000 blocks. The block reward was 50 new bitcoins in 2009 and is currently 6.25 new bitcoins.
Working for Bitcoin
Those who are self-employed can get paid for a job in bitcoins. There are a number of ways to achieve this such as creating any internet service and adding your bitcoin wallet address to the site as a form of payment. There are several websites/job boards which are dedicated to the digital currency:
- Cryptogrind brings together work seekers and prospective employers through its website
- Coinality features jobs – freelance, part-time and full-time – that offer payment in bitcoins, as well as other cryptocurrencies like Dogecoin and Litecoin
- Jobs4Bitcoins, part of reddit.com
- BitGigs
- Bitwage offers a way to choose a percentage of your work paycheck to be converted into bitcoin and sent to your bitcoin address.
Crypto currency wallet vendors.
Like we stated before to start using Bitcoin or other digital assets you need a wallet to store, send and receive cryptocurrencies also a wallet could exist as an hardware or a software examples of them (software) are:
- Coinbase wallet
- Exodus wallet (Available for Android, iOS, PC and Mac).
- Blockchain
- Copay
- Jaxx liberty wallet
While the hardware wallets includes Trezor and Keep key there other ones but these are the majorly used ones and arguably most secure hardware wallets.
The hardware wallet can also be seen as a token given to you by your bank.
Hope we all enjoyed and learned something from this let me know what you think by leaving a comment in the comment section.
All the best from us all @Youngprenuers.