EP 01
Unlocking the World of Cryptocurrency: A Primer on the Basics
Introduction to Cryptocurrency:
Cryptocurrencies are digital or virtual currencies that leverage cryptography for security and operate on decentralized networks. Unlike traditional currencies issued by governments and central banks, cryptocurrencies exist solely in electronic form and are not subject to central authority or government control. This decentralization is achieved through blockchain technology.
Blockchain Technology:
At the heart of most cryptocurrencies lies blockchain technology. A blockchain is a distributed ledger that records all transactions across a network of computers. This decentralized and transparent system ensures that no single entity has control, making it resistant to fraud and censorship. Transactions are grouped into blocks, which are then linked together, creating an immutable chain. This innovation not only enhances security but also facilitates transparency and trust in financial transactions.
Key Terminology:
Blockchain: A decentralized and distributed ledger that records all transactions across a network.
Mining: The process by which new cryptocurrency coins or tokens are created and transactions are verified on the blockchain. Miners use powerful computers to solve complex mathematical problems.
Wallets: Digital tools that allow users to store and manage their cryptocurrency holdings. Wallets can be hardware-based (physical devices) or software-based (applications or online platforms).
Consensus Algorithms: Protocols that ensure agreement among network participants on the validity of transactions. Common algorithms include Proof of Work (PoW) and Proof of Stake (PoS).
To be Continued
