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Crypto Knowledge (Must Read)



What are cryptocurrencies really? *

* If you remove all the noise around cryptocurrencies and reduce it to a simple definition, you will find limited entries in a database that no one can change without meeting specific conditions. This may seem normal, but believe it or not: this is exactly how you can define a currency. *

Take the money in your bank account: what is more than the entries in a database that can only be changed under specific conditions? You can even take coins and physical notes: what are more than limited entries in a public physical database that can only be changed if it matches the condition that physically holds the coins and notes? The money is a verified entry in some kind of database of accounts, balances and transactions.

Many think that the cryptocurrency is just a network tool or a kind of means of taking advantage of people
Well, it is much more than what you are taking and that is why many of us are not doing well

Read also: how to earn free tokens online 

A cryptocurrency (or cryptocurrency) is a digital asset designed to function as a means of exchange through cryptography to secure transactions, control the creation of additional units, and verify the transfer of assets. [1] [2] [3] Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Many will say that the cryptocurrency is a virtual currency ... Even many bankers thought it was ...
.. But they forgot something that even the Fiat currency ends up becoming a virtual currency when it is transferred from one bank to another
The cryptocurrency is only a means of exchanging currency for a different country ... Without anyone regulating it.
Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous cryptocurrencies have been created. These are often called altcoins, as a bitcoin alternative mix. Bitcoin and its derivatives use decentralized control instead of centralized electronic money / central banking systems. The decentralized control is related to the use of the bitcoin blockchain transaction database in the role of a distributed ledger.
The cryptocurrency can not be printed or coined as the Fiat currency
But cryptocurrencies are produced through a method called cryptography. And this is a job done by programmers and miners when solving huge mathematical puzzles of NFS.
How miners create coins and confirm transactions

Let's look at the mechanism that governs cryptocurrency databases. A cryptocurrency like Bitcoin consists of a network of pairs. Each pair has a record of the complete history of all transactions and, therefore, of the balance of each account.

A transaction is a file that says "Bob gives X Bitcoin to Alice" and is signed by Bob's private key. It is a cryptography of basic public key, nothing special. After signing, a transaction is transmitted on the network, sent from one pair to each pair.
This is the basic p2p technology. Nothing special, again.
The transaction is known almost immediately throughout the network. But only after a specific amount of time is confirmed.

Confirmation is a critical concept in cryptocurrencies. You could say that cryptocurrencies have to do with confirmation.

Whenever a transaction is not confirmed, it is pending and may be falsified. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it can not be reversed, it is part of an immutable record of historical transactions: of the so-called chain of blocks.
Only the miners can confirm the transactions. This is your job in a cryptocurrency-network. They take transactions, seal them as legitimate and distribute them on the network. After a miner confirms a transaction, each node must add it to its database. It has become part of the block chain.

For this work, the miners are rewarded with a cryptocurrency token, for example with Bitcoins. Since the activity of the miner is the most important part of the cryptocurrency system, we must remain for a moment and go deeper into it.

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* What are the miners doing? *

* Mainly everyone can be a miner. As a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent a ruling party from abusing it. Imagine that someone creates thousands of pairs and propagates counterfeit transactions. The system would break immediately. *
So, Satoshi established the rule that miners need to invest some work from their computers to qualify for this task. In fact, they have to find a hash, a product of a cryptographic function, that connects the new block with its predecessor. This is called a work test. In Bitcoin, it is based on the SHA 256 Hash algorithm
It is not necessary for you to understand the details of SHA 256. It is only important that you know that it can be the basis of a cryptological puzzle that the miners compete to solve. After finding a solution, a miner can build a block and add it to the block chain. As an incentive, you have the right to add a so-called coinbase transaction that gives you a specific number of Bitcoins. This is the only way to create valid Bitcoins.

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