In the nineties, there have been many attempts to create digital money, but they all failed. Cryptocurrencies emerged as a side product of another invention. Satoshi Nakamoto, inventor of Bitcoin, had goals to invent something many people failed to create before digital cash.The most important part of Satoshi‘s invention was that he found a way to build a decentralized digital cash system. Bitcoin is an electronic cash system that uses a peer-to-peer network to prevent double-spending. Bitcoin is completely decentralized which means it isn’t governed by a central authority. Digital cash can be realized by a payment network with accounts, balances, and transaction.a central server who keeps record about the balances prevents one entity spends the same amount twice. In a decentralized network, this server doesn’t exist. Hence every single entity of the network should have a list with all transactions to check if its an attempt to double spend and validity of future transactions.
A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Bitcoin became the first decentralized cryptocurrency in 2009. Cryptocurrency can be just limited entries in a database that no one can change without fulfilling specific conditions. Money is all about a verified entry in some kind of database of accounts, balances, and transactions. The mechanism ruling the databases of cryptocurrencies like Bitcoin consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account. Basic p2p-technology means after performing public key cryptography, a transaction is broadcasted in the network, sent from one peer to every other peer. Everything is broken if the peers of the network disagree about only one single, minor balance. An absolute consensus can be achieved in cryptocurrencies without a central authority to declare the correct state of balances.
Cryptocurrencies are built on mathematical approach of cryptography. The first decentralized cryptocurrency, bitcoin, was created in 2009 by pseudonymous developer Satoshi Nakamoto.
1.) Fast: Instant propagation of transaction indefinite about physical location within a global network and are confirmed in a very less time.
2.) Secure: Strong cryptographic rules makes scheme destruction impossible.Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency.
3.) Irreversible: A transaction can‘t be reversed after confirmation. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer.
4.) Pseudonymous: It is not possible to connect the real world identity of users with addresses, while it is possible to analyze the transaction flow.
5.) Controlled supply: All cryptocurrencies control the supply of the token. In Bitcoin, the supply decreases in time and will reach its final number around 2140. The monetary policy is attacked by this robust feature of cryptocurrencies, where the supply is limted and controlled. And the Government or a central body or banks cannot change this. They take away the control central banks take on inflation or deflation by manipulating the monetary supply.
6.) Bearer: Cryptocurrencies don‘t represent debts as that of bank accounts. They represent themselves.
Cryptocurrencies: Dawn of a new economy
Cryptocurrencies are like money that promises to preserve and increase its value over time. Cryptocurrencies are also a fast and comfortable means of payment with a worldwide scope, and they are private and anonymous enough to serve as a means of payment for black markets and any other outlawed economic activity. It gave birth to an incredibly dynamic, fast-growing market for investors and speculators. Exchanges like Zebpay, Bittrex, Poloniex or Shapeshift enables the trade of hundreds of cryptocurrencies. Their daily trade volume exceeds that of major European stock exchanges. Bitcoin serves as a digital gold standard in the whole cryptocurrency-industry used as a global means of payment and is the de-facto currency of cyber-crime like darknet markets or ransomware.
Cryptocurrencies are changing the world’s economy in a wild way. Every cryptocurrency comes with a longer vision but some of them get dumped off. It is getting fast and global. There is literally nothing stopping the progress. People buy Bitcoin to protect themselves against the devaluation of their national currency. Cybercrimes using Bitcoins are also increasingly affected in Asia. Banks and governing authorities fear the upliftment of the cryptographic era as this invention has the potential to draw their control away. Investors are starting to buy cryptocurrencies. The revolution of cryptocurrencies emerges to prove that they are here for a long run.