Cryptocurrencies » Cryptocurrency Guide » What cryptocurrenciesare Learn ALL about CRYPTOCURRENCIES
Is it possible that in the future everyone will use cryptocurrencies? Honestly, no one knows. But, believe it or not, one thing is for sure. Cryptocurrencies have revolutionized the current financial system.
Banks, different governments and large multinationals are investing in blockchain research and development. If they are interested in this technology, I assure you that you should also worry about learning about cryptocurrencies.
Cryptocurrencies, what is a virtual currency?
To do this, cryptocurrency.ninja collects the best information about cryptocurrencies on a single website. Our intention is to create the best virtual currency manual. Are you ready to receive the best cryptocurrency training for dummies?
In the first few paragraphs you will find an explanation about cryptocurrencies for beginners, with an introduction to the basics of digital currencies. Later, we will teach you more advanced concepts, so that you become a real expert. If you want to know how to get started with cryptocurrencies, you’ve come to the right place.
If you want to know much more information about cryptocurrencies, visit our Bitcoin Guide.
We try to explain cryptocurrencies for clumsy, so that everyone is able to understand them. What is a cryptocurrency Are they a fraud or is it the money of the future?
Currently cryptocurrencies are a global phenomenon known to most people. However, talking about them still sounds a bit friqui and most people still do not understand well what a cryptocurrency is. On the other hand, banks, governments and many large companies are aware of its importance. If they are interested, you should also learn about cryptocurrencies.
Nowadays it is difficult to find a major bank, a large accounting firm, a prominent software company or a government, which has not researched some cryptocurrency, published a document about them or developed some blockchain project.
But beyond the media noise, the vast majority of people – even these bankers, consultants, scientists and developers – have very limited knowledge about cryptocurrencies. They often don’t even understand the basics of cryptocurrencies.
Cryptocurrencies are digital cash. In cash? Yes. They are not “stuffed into a card” or deposited in a bank account. Electronic currencies are stored in cryptocurrency wallets, which like them, are not seen: They are digital.
In a more advanced explanation, cryptocurrencies are accounting entries in a database or, rather, a digital ledger. But for security, all transactions that are made in this database are encrypted. That is, they are encrypted currencies. This is the meaning of crypto within the term crypto currency.
However, this is an easy explanation about cryptocurrencies. The meaning of cryptocurrencies involves a new technology that has revolutionized the industry, developing applications beyond financial ones.
To understand cryptocurrencies, a more detailed explanation is necessary. So let’s start with cryptocurrencies from scratch.
- What are cryptocurrencies and how do they work? What does cryptocurrency mean?
- What is the history of cryptocurrencies?
- How did cryptocurrencies originate?
- What is the use of mining cryptocurrencies?
- How are cryptocurrencies created?
- Are cryptocurrencies legal?
- How do they influence the digital economy?
What was the origin of cryptocurrencies
If we want to explain the origin of virtual currencies, we have to go to the first of them all: Bitcoin. Cryptocurrencies and bitcoin are two terms that always go hand in hand.
Few people know this, but the creation of a cryptocurrency was not the initial intention of its inventor. Let’s say they are a by-product. Satoshi Nakamoto, the inventor of the most important cryptocurrency, bitcoin, never intended to invent a currency.
Satoshi’s goal was to develop “a peer-to-peer digital payment system,” he said in late 2008.
A peer-to-peer network, peer network, peer-to-peer network, or peer-to-peer (P2P) network is a network of computers that share all the information with each other. There is no central server, but they are nodes that behave as equals to each other.
What it really did was announce the first version of Bitcoin: A new electronic cash payment system that uses a peer-to-peer network to avoid double spending. It was the birth of bitcoin and virtual cryptocurrencies. A completely decentralized network, without a central authority to control it. There wasn’t even a central server. If they are decentralized, who supports cryptocurrencies? Who controls them?
The support of cryptocurrencies comes from the trust of their users. Just like a dollar or a euro, it is the people who give value to cryptocurrencies. But unlike these, there is no central body that controls them.
This provides a huge advantage to cryptocurrencies. Repeatedly in history, governments have devalued their current currency with their own objectives, seriously harming their population. However, the value of cryptocurrencies can never be manipulated, their price is self-regulated in their own market.
Satoshi wasn’t the only one. In the nineties, there were many attempts to create digital money. All these attempts at digital currencies were controlled by a central entity. This authority ruled over the value of the currency and decided when and how much money was issued. Obviously, they all failed.
The most important part of Satoshi’s invention was that he found a way to build a decentralized digital payment system. The success of the project was not the creation of bitcoin, but the invention of the decentralized system. No intermediaries.
The history of cryptocurrencies and bitcoin are totally linked.
This decision became the origin of cryptocurrencies. Decentralization was the missing piece and the trigger that has revolutionized the current financial system. The reason is a bit technical and complex, but if you manage to understand it, you will know more about digital currencies than most people. Therefore, let’s try to explain it as simply as possible.
Satoshi Nakamoto, by inventing the first of them, is granted to be the creator of cryptocurrencies.
Learn more about the origin of virtual currencies in the section on the history of cryptocurrencies.
Maybe a video about cryptocurrencies can help you understand it better? How cryptocurrencies work
For the operation of a virtual payment system it is necessary to keep track of all the accounts, balances and transactions that are made in it. A major problem that a payment network must face is to avoid the so-called double expense: preventing someone from spending the same amount twice. Generally, in the systems of current financial institutions, this is done by a central server that keeps track of transactions.
In a decentralized network, this server does not exist. So the coordination of each of the entities of the network is necessary to do this work. All nodes in the network need to have a list of all transactions to check if future transactions are valid or an attempt to double spending.
But how can these entities maintain a consensus about these records?
If the peers of the network disagree on only a single minor balance, everything is broken. They need absolute consensus. Usually, a central authority is taken, again, to declare the correct state of the balances. But how can consensus be achieved without a central authority?
No one knew until Satoshi appeared. In fact, no one believed it was possible.