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Cryptocurrency is a digital asset designed to work as a medium of exchange. It’s designed to make transactions secure.
Unlike regular money, the digital assets have no physical presence and differs from regular transactions by using decentralised control as opposed to central banking systems.
Normally in banking, corporate boards or governments control the supply of money by printing units of money or demanding additions to digital banking ledgers. However, in the world of cryptocurrency, the production of currency is generally capped. For example Litecoin consists of 84 million units, as opposed to Bitcoins 21 million.
The same is true of "altcoins" (alternative coins to bitcoin) - similar currencies which have been launched in Bitcoin's wake. These include Ethereum and Ripple, and their objective is to connect different payment systems together.
The most searched question on google in 2014
Bitcoin is the first decentralized peer-to-peer payment network – essentially, it’s a digital currency powered by its users. In the past couple of years, Bitcoin took off as more of a ‘buzz’ word than users truly diving in to understand the currency – which is why it was the most googled question in 2014 and is still heavily talked about today. Bitcoin started when Satoshi Nakamoto had a vision of simple and easy transactions without the friction, intermediaries or regulation of the government – and that’s how it was born. In the simplest form, Bitcoin is a digital currency that allows you to buy and sell goods without the involvement and fees of traditional bank institutions. These transactions take place over a safe and secure network with state-of-the-art technology that helps to track your transactions and protect your funds.
It is a database that is validated by a wider community, rather than a central authority. Individuals involved with the blockchain verify that its collection of records is correct, rather then relying on a single entity, such as a bank or government. Each “block” represents a number of transactional records, and the “chain” component links them all together with a hash function.
Cryptocurrency mining includes two functions:
- Adding transactions to the blockchain (securing and verifying)
- Releasing new currency
Mining Bitcoin and other cryptocurrencies involves a computer solving a difficult mathematical problem with a 64-digit solution. For each problem solved, one block of Bitcoin is processed and the miner is rewarded with new Bitcoi