What is crypto all about?
Cryptocurrency is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Most of this makes sense. We all hate Facebook using our data for advertisements. What if you could build Facebook without the main company, with everyone agreeing to a policy and following it.
Now imagine doing the same but for currency. No need for a company like Paytm controlling your transactions or even monitoring it. Total Privacy & totally not dependent on a company that may not have your best interests at heart!
History?
The first cryptocurrency was Bitcoin, designed by Satoshi Nakamoto in a secret whitepaper. The next step was taken by Vitalik Buterin when he created Ethereum where one can now use the underlying tech of Blockchain to build anything**.**
How can we sync changes from millions of people without a centralized system?
Imagine a ledger (a book in which account transactions are recorded) of all bitcoin transactions. Now we decentralize this ledger across multiple people who are ‘kind’ enough to host this book of transactions (similar to torrents).
Since many people have this ledger, the order of transactions might get messed up based on location & network delay. So to rectify this, each person who hosts this ‘ledger’ have to perform a mathematical calculation proving that this set of transactions is valid.
First person who finishes the calculation is accepted as the correct set of transactions. This person is also paid for his effort in calculating & setting the right transaction.
Some key phrases: