Intro to what is a cryptocurrency and Cryptocurrencies – Part 1
Cryptocurrencies, or virtual currencies, are digital means of exchange whose security is ensured through cryptography. From the classical Greek word, ‘kryptós,’ the word crypto means concealed or secret. Private individuals and groups who create and use digital currencies have multiple benefits.
What Is a Cryptocurrency?
Some people find cryptocurrency to be exciting while others find it to be distressing, as it challenges the orthodoxy of how a currency works. What is cryptocurrency, and how is it different from other currencies? All cryptocurrencies are digital, unlike other currencies. Cryptocurrencies cannot be printed or minted. All transactions are conducted online. The government generates conventional forms of currency, which are then circulated through banks.
1. cryptographic hash function
Cryptographic hash function is an algorithm that takes an arbitrary amount of data input—a credential—and produces a fixed-size output of enciphered text called a hash value, or just “hash.” Instead of the password itself, the enciphered text can be stored, and used to verify the user.
Trade with plan not greed hope or fear– Antoroy
2. Hash pointers and data structures:
By using hash pointers, a linked list, also known as a blockchain, can be built. The hash stored in the hash pointer is the hash of the whole data of the previous block that includes the hash pointer to the block before it.
3. Digital signatures:
Message authentication is based on public-key primitives, such as digital signatures. It is common to sign handwritten or typed messages with a handwritten signature. Signatories are bound by them. In a similar way, a digital signature binds a person or entity to digital data.
4. Public keys as identities
By using a public key as an identity, you can refer to some individual or entity using the key. With digital signatures, one can verify the validity of a message based on the public key, the message, and the signature.
This video explains what cryptocurrency is and why cryptographic operations such as hash functions and digital signatures are so useful. We will look at a simplified Cryptocurrency in this section, which gives us an idea how systems like BitCoin work. To explain how BitCoin works and what it means, I will need about ten more lectures. Let’s start with the simplest cryptocurrency we can imagine: GoofyCoin.
Definition of Cryptocurrency
By definition, a cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double spend. A large number of cryptocurrencies are decentralized networks based on blockchain technology-a distributed ledger enforced by disparate computers. Cryptocurrencies are distinguished by the fact that they are generally not issued by a central authority, which means they are theoretically immune from government manipulation and interference.