Cryptocurrency

How does it work ??

Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don’t have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.Unlike government currencies like bitcoin, these type of currencies is created by the same mathematical formulas that make the cryptocurrency work. Thus, cryptocurrencies use decentralized control, which works through distributed ledger technology that serves as a public financial transaction database.

Architecture of Blockchain..

The blockchain technique allows digital information to be distributed, rather than copied. This distributed ledger provides transparency, trust, and data security.Blockchain architecture is being used very broadly in the financial industry. However, these days, this technology helps create software development solutions for cryptocurrencies and record keeping, digital notary, and smart contracts.

In the case of the distributed network of blockchain architecture, each participant within the network maintains, approves, and updates new entries. The system is controlled not only by separate individuals, but by everyone within the blockchain network. Each member ensures that all records and procedures are in order, which results in data validity and security. .To summarize things, the blockchain is a decentralized, distributed ledger (public or private) of different kinds of transactions arranged into a P2P network. This network consists of many computers, but in a way that the data cannot be altered without the consensus of the whole network .The structure of blockchain technology is represented by a list of blocks with transactions in a particular order.

Some of the famous Cryptocurrency

Bitcoin

Bitcoin was created by Satoshi Nakamoto, a pseudonymous person or team who outlined the technology in a 2008 white paper. It’s an appealingly simple concept: bitcoin is digital money that allows for secure peer-to-peer transactions on the internet.

• Unlike fiat currency, Bitcoin is created, distributed, traded, and stored using a decentralized ledger system known as a blockchain.
• Bitcoin and its ledger are secured by proof-of-work (PoW) consensus, which is also the “mining” process that introduces new bitcoins into the system.
• Bitcoin can be purchased via various cryptocurrency exchanges.
• Bitcoin’s history as a store of value has been turbulent; it has gone through several boom and bust cycles over its relatively short lifespan.

Ethereum

Ethereum being programmable means that you can build apps that use the blockchain to store data or control what your app can do. This results in a general purpose blockchain that can be programmed to do anything. As there is no limit to what Ethereum can do, it allows for great innovation to happen on the Ethereum network.While Bitcoin is only a payment network, Ethereum is more like a marketplace of financial services, games, social networks and other apps that respect your privacy and cannot censor you.

Dogecoin

Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a “joke”, making fun of the wild speculation in cryptocurrencies at the time. It is considered both the first “meme coin”, and, more specifically, the first “dog coin”. Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the “doge” meme as its logo and namesake. It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of over $85 billion on May 5, 2021. As of 2021, it is the sleeve sponsor of Watford Football Club.

Tether

Tether is an asset-backed cryptocurrency stablecoin. It was launched by the company Tether Limited Inc. in 2014. Tether Limited is owned by the Hong Kong-based company iFinex Inc. which also owns the Bitfinex cryptocurrency exchange. As of July 2022, Tether Limited has minted the USDT stablecoin on ten protocols and blockchains.Tether is described as a stablecoin because it was originally designed to be valued at USD $1.00. Tether Limited has stated that it maintains USD $1 of asset reserves for each USD₮ 1 issued, but has been fined by regulators for failing to do this and has failed to present audits showing sufficient asset reserves.

Solana

Solana was proposed in a white paper Anatoly Yakovenko published in November 2017. This paper described a technique called “proof of history”. Solana’s first block was created on 16 March, 2020.Solana achieves consensus using a proof-of-stake mechanism and its model, known as “proof-of-history” mechanism. The Solana whitepaper describes this design as a decentralized clock. Proof of history enables network participants to have a high degree of certainty that an event took place at a specific moment in time.

Just a small gist about crytocurrencies ..