“What is blockchain and cryptocurrency?”

This is a question that is asked more and more around the world as cryptocurrencies become more mainstream than ever before.
We live in a time when we depend on technology more than ever, And anyways majority of our money today is digital and not in a printed form so a question that a lot of counties and people started asking themselves is why not move to cryptocurrencies as well?________________

Where did it all begin?

The idea behind cryptocurrencies is probably a bit older than you originally thought and it all started approximately in 1983 when an American Cryptographer David Chaum created an anonymous cryptographic electronic money called ecash, in 1995 he implemented it through Digicash as an early form of cryptographic electronic payment that required user software to withdraw notes from a bank and also designed specific encrypted keys before it can be sent to a recipient, This allowed complete anonymity since the digital currency was untraceable by the issuing bank any third party or by the government.

Later in approximately 2009 the first decentralized digital currency was created and was named BitCoin by an anonymous developer with an alias named Satoshi Nakamoto, and it remains the largest cryptocurrency by market capitalization.

What makes Cryptocurrency?

There are a few categories that a cryptocurrency system needs to meet according to Jan Lansky –

• The system does not require a central authority; its state is maintained through distributed consensus.(which means it’s self-sustainable)
• The system keeps an overview of cryptocurrency units and their ownership.(it’s documenting and verifying all transactions)
• The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
• Ownership of cryptocurrency units can be proved exclusively cryptographically. (all the information is stored on the Blockchain and can be back-traced)
• The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
• If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them. (which means it can’t be duplicated)

So What is the Function of Cryptocurrencies in short

The main function of cryptocurrencies is to buy goods and services using them as a form of payment, these days the main use for buying cryptocurrency is to exchange it for other cryptocurrencies and exchange it for profit since it’s a very volatile market that can have a very big short term movement compared to stocks, Cryptocurrencies are becoming more popular than ever and you can find people selling as far as houses directly in exchange for cryptocurrencies these days.

Cryptocurrencies are operating on a complex technology called the Blockchain which Steve Wozniak(Co-Founder of Apple) referred to by saying Bitcoin “Is a mathematical miracle”.
Blockchain is a decentralized technology that is spread across many computers that work together in verifying and keeping a record of any transaction that is made on it, and one of the appeals of this technology is its level of security.

How does it Work?

The way cryptocurrencies work is very complex, but I will try to keep things as simple as possible without going all technical here

Cryptocurrencies are working in general a lot like credit cards, but instead of exchanging regular currencies like dollars or euros, it exchanges digital assets for goods and services, for you to be able to exchange cryptocurrency for goods and services you need to have a digital wallet used to store your cryptocurrency holdings and send/receive cryptocurrency. All of this is backed up by a private key to your wallet and this is like the credentials to your bank account and like many like to say on social platforms “Not your keys, Not your coins”.

So what’s the difference between cryptocurrency and regular currencies?

The major difference between the two is pretty simple,

• BlockChain Technology-This technology is what makes the whole difference, Cryptocurrencies are Decentralised and it means they are not controlled by any government, the government can’t choose to simply create more and inflate them, or even track the specific transactions to a specific individual(Depending on the cryptocurrency)and there is not central authority overseeing it. what this does is fascinating since this blockchain is storing information in “Blocks” that are chained one to another in chronological order and can securely verify any transaction ever made on the block. The blockchain is also home to processes that are called “proof of work” and “proof of stake” or a hybrid of both.
  -Proof of work – Generally cryptocurrency is created by computers solving complex equations and mathematical puzzles that will ultimately validae transactions or/and create new coins. This process allows cryptocurrency transactions to be proceeds peer-to-peer in a secure manner without needing a third party.
  -Proof of stake – unlike proof of work, instead of using computers to solve complex equations to validate transactions and create new coins, this process rewards holders of coins based on the amount they stake.
• Cryptography- is the process of creating the blockchain secure and linking it together, the codes referred to as Hashes are making the transactions inaccessible to hackers and therefor make the blockchain much more secure

Bottom Line

So what is blockchain and cryptocurrencies, In a sense, cryptocurrencies are a huge new invention that can change the world since the technology it’s built on is something that has much more uses than ever before, countries are starting to utilize it as seen in China, Ukraine, El Salvador, USA and more. it has many more uses than mentioned in this article and probably many more uses will be invented in the future.

What can you do about this rapidly growing new asset class?

Well, you can buy it to use it, Or you can Invest in it, Or Trade it!

As it is we have a great, fully regulated, and trustworthy company you can use if you’re from the united states – eToro Crypto Trading US Regulated

Or if you’re from anywhere else – eToro

And we also created a guide on how to open an Account with eToro in which you can safely Buy, Sell and trade these fascinating cryptocurrencies if you click here.

Good luck on your journey!