Crypto Academy Season 3 Beginners' course - Task 3: Bitcoin, Cryptocurrencies, Public chains.
In the world of crypto, we daily use words like Bitcoin, Cryptocurrencies, and Public Chains, but still some people it is hard to understand what exactly they are, especially those who newly joined the crypto world.
This post is a course in which we learn some basics and understand about Bitcoin, Cryptocurrencies, and Public Chains.
Cryptocurrencies are Digital Tokens or we can say they are Virtual Currencies that does not exist anywhere physically. Mostly the cryptocurrencies are found on a Decentralized platform based on a Blockchain. Blockchain Technology is a type of database that stores information.
Cryptocurrencies and Blockchains are invented to perform the transactions, they do what exactly Bank does for you, but Cryptocurrencies are invented to avoid the use of Banks. The concept of Decentralization networks, Cryptocurrencies, and Blockchains does not require any third party to execute and process the transaction.
In a traditional banking system, when you want to send money from one country to another the Bank act as a mediator like a third party that checks all identity and then executes the transaction process, here Bank charge high fees from both sender and receiver also it require multiple days to complete the transaction. However, in Blockchains technology you can send/receive Cryptocurrencies instantly anywhere, and fees also low compared to the traditional banking system.
Cryptocurrencies are not like the daily cash that we can keep in our physical wallets. Cryptocurrency is a digital currency that can be accessed, used, transfer via the Internet only from a computer and mobile device.
There is no central server in a Cryptocurrency transaction system like a bank and transactions of the cryptocurrency processed on the network with a high number of computers and mobile devices. Cryptocurrency not controlled by any central authority or single person.
A Cryptocurrency network is based on a peer-to-peer network which means direct end to end and no mediator like Bank as the third party mentioned above.
Cryptocurrency systems use encryption methods to translate data into the code and this can be decrypted by the person who has a required key.
Cryptocurrency transactions and their wallet require mainly the Public key and Private key. A public key is for the account address and the Private key use to sign the transaction.
The major drawback in Cryptocurrency is once you lost the Public key OR Private key there is no way to recover and you will lose everything store in a wallet. Hence, it is must important to save the Public key and Private key offline from where you can get easily even your system crashed, suggesting to store it in the cloud service like Google Drive.
Bitcoin is not just a coin that traded in a crypto market, also it is not just a coin that we can mine and earn.
Bitcoin is the first coin in the Cryptocurrency world. Bitcoin is the first Digital currency and as we know it is invented in the year 2009 by a programmer who's name is Satoshi Nakamoto. However, the identity of Satoshi Nakamoto is still a mystery.
In the year 2008 when a horrible global crisis happened, Satoshi Nakamoto was in a plan to invent a digital payment system that will not be dependent on the government or any other financial institute. Satoshi Nakamoto was trying to build an electronic payment system that will be purely decentralized. As mentioned above the decentralized means it is independent of central authority.
In the year 2009 when Bitcoin was introduced, at the initial stage, the people did not understand this coin and its mechanism technology which is Blockchain. Later on its gain a lot of popularity and still in the current date the Bitcoin sustained on the Rank 1 in the cryptocurrency world. After Bitcoin, there are a lot of cryptocurrencies tried to introduced, and many got failed, but a lot of other cryptocurrencies got success.
Bitcoin is the first digital cryptocurrency that is decentralized and on a peer-to-peer network so that w can send Bitcoin as a currency from one person to another person through Bitcoin peer-to-peer network without a mediator like Banks. With this, we send currency quickly, and fees also low compared to the traditional bank. Also, because it is decentralized so you have 100% power over your currency.
Now Bitcoin has gained a lot of popularity because it is using for business and accepts payment in Bitcoin. Also, it has a high volume in the market and a lot of fluctuation because it is not controlled by the government and only users are controlling it, hence Bitcoin and other cryptocurrencies are growing now.
- Bitcoin can be store in a digital wallet and can access this wallet via the internet from a computer or mobile.
- Bitcoin can send one person to another person via Bitcoin Network.
- We can buy anything with Bitcoin.
- Bitcoin trades on Crypto exchanges wherein you can buy or sell bitcoins.
Bitcoins are secure in their blockchain which processed by the Miners. This miner received a reward with some amount of Bitcoin to verify and process the transaction. The lower fees which you pay in Bitcoin transaction, some amount from it goes to the miners who put their contribution like electricity computer hardware for the bitcoin transaction process.
Bitcoin is the first innovative currency that is good to use as a business to minimize transaction fees.
Public Chains is like Decentralize system. In Public Chains anyone can take participation from anywhere and there is no restriction. The attractive part in Public Chains is everyone gets equal rights.
Let's understand the Public Chains concept in a more simple term by comparing it with the Private Chain.
As mentioned just like Centralize and Decentralize the Private and Public Chain are the same.
In Private Chain companies, there is a single person or group of people who are in that system have authority to drive the system and managed it centrally, but Public Chain is open for everyone to join the system. In this, anyone can make a transaction send - receive to anyone in the world. Also, anyone can audit the system who are from the audit team.
A public chain is an open network. Since anyone can take a part in it hence anyone can write, view, read the data in the blockchain and this data is store in the public domain which is accessible to everyone.
Public Chain is decentralized and also Immutable. Since it is open for everyone hence it is important that the data store in a blockchain remain unchanged which means no one can change it, here Immutable works. Once data validated it can not be modified and delete in the blockchain.
The data store in the Public blockchain has a transparency which means anyone can view it but can not modify it.
Every computer that connected to a Public chain is a node. In order to validate the transaction it much be authorized by each node and through the process like agreement. Once the transaction is authorized it gets recorded in a public blockchain. The nodes connected in a public blockchain received some amount of coins like an incentive to authenticate the transaction and to encourage people to join the network.
You can attempt any one out of three questions mentioned below.
(1) What Is Cryptocurrency and How You Would Like To See Cryptocurrency In The Feature?
(2) What Is Bitcoin and what was the Aim Behind Bitcoin Invention? Is Cryptocurrency Good For A Business To accept As Payment? Why?
(3) What Is Public Chain and What will be the Advantages and Disadvantages of Public Chain?
(1) Your article should be at least 300 words.
(2) This homework task does not have an expiry, however, you can submit your assignment only once.
(3) Eligibility Criteria--
- Must have a reputation of 50 or above
- Must have at least 125 SP (excluding any SP delegated-in)
- Must have completed Achievement Task-4 in Newcomers' Community
(4) Add tag #academy-intro03, #cryptoacademy in your post and should be at the first two tag. And also make sure you post in the Steemit Crypto Academy community.
(5) You can attempt any ONE out of the three questions, but you must write the entire Question in Bold letter at the beginning of the post.
(6) Keep sharing only ORIGINAL content as PLAGIARISM isn't supported.
(7) Any images used should be from copyright-free sources and fully referenced.