Chapter 1: Basics of Cryptocurrency
1.1 Introduction
1.1.1 Basic Concept of Money
Money is a medium of exchange that facilitates the trade of goods and services. It acts as a unit of account, a store of value, and a standard of deferred payment.
1.1.2 What is Cryptocurrency and How It Works?
Cryptocurrency is a digital or virtual form of money that uses cryptography for security. Unlike traditional currencies issued by governments (fiat), cryptocurrencies operate on decentralized networks based on blockchain technology. This means transactions are verified by network nodes through cryptography and recorded in a public ledger known as a blockchain.
1.1.3 What is Blockchain and How Does It Work?
A blockchain is a distributed database that maintains a continuously growing list of ordered records, called blocks. Each block contains a timestamp and a link to the previous block, ensuring data integrity. Blockchain operates on a decentralized network of computers (nodes) that validate and record transactions through consensus mechanisms, making it secure and tamper-proof.
1.1.4 History of Cryptocurrency
The concept of digital currency dates back to the late 20th century. However, the first successful and widely recognized cryptocurrency, Bitcoin, was introduced in 2009 by an anonymous person or group known as Satoshi Nakamoto. Since then, thousands of cryptocurrencies have been developed, each with unique features and applications.
