By Natalia Andriano
Nowadays cryptocurrencies are taking a more important role in global finances. People start talking about blockchain, mining and minting everywhere we go. But what are cryptocurrencies and why are they so important? What makes them so interesting?
Cryptocurrency is a virtual currency that serves to exchange goods or services through a secure transaction system (since they implement cryptography), without the need for an intermediary or regulatory entity. There are several cryptos that can be bought and exchanged, e.g: Bitcoin, Ethereum, Algorand, etc (CoinMarketCap)
So, if cryptocurrencies don’t have an intermediary or a regulatory entity how can we trust them?, how are they secured?
Blockchain is a distributed and secure database that records all cryptocurrency transactions between two parties. This database is located on millions of computers and its access is public (the identities of the participants, buyer and seller are private, what is public is the transaction data).
Within the blockchain, each block contains transactions. Each block represents a set of accepted changes to the network state. All the information of the transaction is registered in the block and in the network when it is uploaded to the blockchain. Any transaction can be accessed by anyone (Blockchain Transaction), the blockchain has a chronological sequence.
One of the key factors for blockchain’s popularity is the way that the Double Spend (What is Double Spending?) problem is tackled. Double-spending is the risk that a currency can be spent twice, which is inherent to digital and distributed currencies. Blockchain handles the double-spending problem by implementing a confirmation mechanism and maintaining a universal ledger.
Smart contracts are lines of code that are stored on a blockchain and automatically execute when predetermined terms and conditions are met. At the most basic level, they are programs that run as they’ve been set up to run by the people who developed them. A smart contract is an agreement between two people in the form of computer code. They run on the blockchain, so they are stored on a public database and cannot be changed. The transactions that happen in a smart contract are processed by the blockchain[NA1] , which means they can be sent automatically without a third party
But what if I’d like to exchange cryptocurrencies, how do I do it?
All I need is an address, but a wallet helps you to manage your assets, especially if you have different coins. .Wallets are a place to store cryptocurrencies safely. They can send and receive cryptocurrencies. They can be multi-currency. You will have to create one to start exchanging money. For example, at Bitgo’s page you can create a new wallet and select any coin.
Then you can start exchanging money.
Which is the most common used crypto currency?
Bitcoin is still by far the most popular cryptocurrency and its price movement has a strong impact on the rest of the crypto market. Each Bitcoin is basically a computer file which is stored in a ‘digital wallet’ app on a smartphone or computer. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people. Every single transaction is recorded in a public list called the blockchain. Bitcoin is a digital currency created in 2009 by a mysterious figure using the alias Satoshi Nakamoto. It can be used to buy or sell items from people and companies that accept bitcoin as payment, but it differs in several key ways from traditional currencies.Bitcoinmining is the process of creating new bitcoin by solving a computational puzzle. Bitcoin mining is necessary to maintain the ledger of transactions upon which bitcoin is based. Miners have become very sophisticated over the last several years using complex machinery to speed up mining operations