James Phang

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What is Crytocurrency?

Cryptocurrency is a digital currency that uses an encryption technique to regulate the generation units of currency, which operate independently from a central bank.  

Cryptocurrency uses a peer-to-peer network to regulate and verify the transfer of funds therefore there is no central system/bank that regulates the transactions, its verified by the network. For example, miners can sell their mined currency to a buyer but once that transaction has been verified by the miners by their pass key, the verification of that transaction gets added to everyone's database. Once the transaction of the currency has been done, the transaction cannot be reversed it is set in stone. Only miners can verify if the transaction is legit therefore the network should be full to legit transactions. The whole cryptocurrency network is self-regulated. 

Miners

Any one can be miners however to ensure that the mined currencies are legit, miners have to dedicate their computer power to solve cryptographic puzzles to find a hash - a product of a crytographic function. This new cyptofunction connects to the block of the predecessor. Once the computer has found the solution the miner can build a block (currency) and add it to coinbase-transaction which will give the miner certain amount of coins. This is to verify the miner’s work and to prove that the blocks mined are legit are not duplicates and are unique. The complex puzzles invests a lot of computing power for the miner to invest so the amount of coins that can be generated in a given time are limited. 

What Can You Use Cyptocurrency For?

Cryptocurrency can be used to buy good and invest in stock. Cryptocurrency has a number of transactional properties. Here are the transactional properties:

1) Irreversible - All transactions are irreversible, once funds are transferred you cannot backtrack on the transaction. There is no safety net.

2) Pseudonymous - Transactions or account are not connected to real world identities. 

3) Fast and global - Transactions are instant and can be sent anywhere around the world without delay. 

4) Secure - Cryptocurrency are locked by a public key cryptography system. Only owners of the private key can send cryptocurrency. Cryptography and complex numbers make it impossible to break the system and abuse it. 

5) Permissionless - You do not need permission to use  cryptocurrency. All that is needed is the software that is free to download. Once installed, you can receive and send coins. 

Useful Links

https://blockgeeks.com/guides/what-is-cryptocurrency/