What is Cryptocurrency?

The first cryptocurrency (bitcoin) was established in 2008 when the pseudonymous Satoshi Nakamoto invented a decentralised electronic cash system which uses a peer-to-peer distributed timestamp server to prevent double-spending. This distributed server generates computational proof of the chronological sequence of transactions.

In the process of inventing this payment system, Satoshi also pioneered the first blockchain database, an essential component of this system. Since then, many other cryptocurrencies have emerged of which most use more or less the same type of blockchain technology as bitcoin.

What’s so amazing about blockchain technology, is that it can be used to improve many different processes in different industries. For example, certain role players in the financial services sector have started using blockchain technology to implement systems which are much more transparent, effective, and cheaper. The blockchain automatically executes certain functions when certain conditions are met. These smart contracts are also self-maintained. A cryptocurrency is a digital or virtual currency which is usually created by computers performing painstaking mathematical computations and thereby converting electricity into long strings of code that have monetary value. This computing is done in a distributed network and is called cryptocurrency mining.

Although not all cryptocurrencies are created in this way, most of the prominent ones are. The algorithm which is normally used to mine cryptocurrencies is a decreasing-supply algorithm which limits the supply of these cryptocurrencies using encryption techniques.

To put it in simple terms, this type of algorithm ensures that, as more and more of the cryptocurrency is mined, it becomes progressively more difficult and resource-intensive to mine. When the supply of a currency is limited, it can help to secure its value. The encryption techniques used to mine cryptocurrencies, coupled with blockchain technology, are also used to facilitate the verification of fund transfers between users of the specific cryptocurrency.

About Blockchain

The blockchain is a public ledger that records cryptocurency transactions.

A novel solution accomplishes this without any trusted central authority: a network of communicating nodes running cryptocurency software performs maintenance of the blockchain. The blockchain is seen as the main technological innovation of Bitcoin,and all cryptocurency since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain, which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. There is a countless number of such blocks in the blockchain. So are the blocks randomly placed in a blockchain? No, they are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.

Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system. The full copy of the blockchain has records of every Bitcoin transaction ever executed. It can thus provide insight about facts like how much value belonged a particular address at any point in the past.

About Mining

With Ethereum, miners use special software to solve math problems and the system issue a certain number of Ethereums in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

Ethereum miners help keep the Ethereum network secure by approving transaction. Mining is an important and integral part of Ethereum that ensures fairness while keeping the Ethereum network stable, safe and secure.

Also mining is the process of adding transaction records to Ethereums public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain, as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.

About Trading

Trading Ethereums is simple. Just buy lower price and sell for high price. There are multiple exchanges where big companies and individuals can trade multiple times per hour and every single day.