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Author: Admin | 2025-04-28
Based on the SHA 256 Hash algorithm.You don‘t need to understand details about SHA 256. It‘s only important you know that it can be the basis of a cryptologic puzzle the miners compete to solve. After finding a solution, a miner can build a block and add it to the blockchain. As an incentive, he has the right to add a so-called coinbase transaction that gives him a specific number of Bitcoins. This is the only way to create valid Bitcoins.Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break.The Origin of CryptocurrencyIn the early 1990s, most people were still struggling to understand the internet. However, there were some very clever folks who had already realised what a powerful tool it isSome of these clever folks, called cypher punks, thought that governments and corporations had too much power over our lives. They wanted to use the internet to give the people of the world more freedom. Using cryptography, cypher punks wanted to allow users of the internet to have more control over their money and information. As you can tell, the cypher punks didn’t like trusted third parties at all.At the top of the cypher punks to-do list was digital cash. DigiCash and Cybercash were both attempts to create a digital money system. They both had some of the six things needed to be cryptocurrencies but neither had all of them. By the end of thenineties, both had failed.The world would have to wait until 2009 before the first fully decentralized digital cash system was created. Its creator had seenthe failure of the cypher punks and thought that they could do better. Their name was Satoshi Nakamoto and their creation was called Bitcoin.Understanding cryptocurrency means first understanding Bitcoin…The Story of BitcoinNo one knows who Satoshi Nakamoto is. It could be a man, a woman or even a group of people. Satoshi Nakamoto only ever spoke on crypto forums and through emails.In late 2008, Nakamoto published the Bitcoin whitepaper. This was a description of what Bitcoin is and how it works. It became the model for how other cryptocurrencies were designed in the future.On January 12, 2009, Satoshi Nakamoto made the first Bitcoin transaction. They sent 10 BTC to a coder named Hal Finney. By 2011, Satoshi Nakamoto was gone. What they left behind was the world’s first cryptocurrency.Bitcoin became more popular amongst users who saw how important it could become. In April 2011, one Bitcoin was worth one US Dollar (USD).By December 2017, one Bitcoin was worth more than twenty thousand US Dollars! Today, the price of a single Bitcoin is 4,550 US Dollars. Which is still a pretty good return, right?Why should I use cryptocurrency?You already use debit cards and
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