When we hear word cryptocurrency, 1st thing comes into our mind is Bitcoin(BTC), Ethereum(ETH), DOGE. Cryptocurrency has been a revolutionary tech in 21st century which trying to replace the traditional currency and take the position of global currency.
Okay, lets keep the currency thing aside for a moment and look this as a technology. Crypto Currency is the primary use case created for the Blockchain technology, a revolutionary tech created on the concept of decentralization and data privacy.
Blockchain aims to store records forever and maintain the integrity of data by removing the control of centralized environment. When ever any log/transaction created it will store in a Block( Database) which have a limited storage. Once it is filled new block gets created and attached to previous block with linked information. Hence it becomes blockchain technology.
Now let’s come back to Cryptocurrency, the primary use case of Blockchain.
Bitcoin was the first project in the cryptocurrency usecase, created by Anonymous person called Satashi Nakamoto.
Bitcoin uses the strong encryption technique to create a digital currency with a unique ID ( Similiar to Unique number on our currency note) which makes it unique and secure.
Encryption is a concept of securing the data by convering into a computer readable format and can only be readable with a set of key to unlock the original data.
Based on the source code of Bitcoin, Bitcoin works on the concept of Proof-Of-Work, This method describes that a bitcoin will be created( Minted) by executing a complex mathematical calculation which requires high computing power. Hence these will be run my machine with High computing power or we can combine all the computation power to solve complex algorithm to create a token.
What is the benefit for Crypto Miners?
Miners are people who will use their machines to solve this complex calculation for creating a bitcoin. Miners will be rewarded with little amount of Bitcoin for their resource contribution. This reward mechanism was also part of the project to create a individual/self economy.
When Bitcoin introduced for the first time, 1st transaction was at a pizza shop. The first Bitcoin transaction involved moving 10 BTC which was sent from Satoshi Nakamoto to Hal Finney, who had downloaded the Bitcoin software the same day Nakamoto released it.
Future of Crypto?
Cryptocurrency has gained more adoption from 6 years, Many countries starting accepting cryptocurrency as a legal tender and El Salvador was the 1st one to implement it.
Many High Networth Individuals/Institutions have started trusting Bitcoin and other crypto currencies and Investing large amounts in it by Adding their Portfolio.