The magical currency system — cryptocurrency

The magical currency system — cryptocurrency

Most of us have heard about digital currency.  Yet, we are not very well acquainted with what cryptocurrency is.  Cryptocurrency is actually a system of limited entries in a database, where it is mandatory for certain conditions to be fulfilled.  As a matter of fact, even the real money going around in the current financial system is also actually similar.  The only difference is that you can actually physically own these coins and notes unlike the virtual currency that cryptocurrency kripto para birimleri comprises of.  The essence of any money, real or virtual, is that it is a system of verified entries in specific databases of accounts, transactions and balances.

inventing Bitcoin

What is the mechanism that rules the databases of cryptocurrencies?  Satoshi Nakamoto, the unknown inventor of Bitcoin gave birth to this concept of cryptocurrency. He happened to create it inadvertently as a side invention while he was actually in the process of inventing Bitcoin.  Most people are still unaware of what cryptocurrency is all about.  A cryptocurrency like Bitcoin is all about a network of peers.  Every peer involved would have a complete history of all the transactions that happen and also would know the balance of every account. Until a transaction is confirmed it remains pending and is forgeable. Once a transaction gets confirmed, it becomes permanent.  It then is no longer forgeable and cannot be reversed either.  It becomes a part of the immutable record of historically recorded transactions.

In the cryptocurrency kripto para birimleri network it is the job of miners to confirm transactions.  They are the ones who look into transactions, stamp them for legitimacy and pass them on in the network.  Once a miner confirms the transaction, each of the nodes would add the transaction to the database and it would thus successfully become a part of the blockchain.  In cryptocurrency anybody can be a miner.  To guard against members indiscriminately becoming miners and abusing the system Satoshi set a the terms that miners must invest some of their computers’ work in order to be qualified to take up this task.

Miners need to solve cryptographic puzzles in order to gain authority to create Bitcoins.  The amount of cryptocurrency token that they can create is commensurate to the difficulty level of the puzzles the miners solve.  This ensures that they can create only a limited amount of cryptocurrency in a specific amount of time.

Comments are closed.