Cryptocurrency and Bitcoins!

Imagine you're having conversation with 

your friends now at some point in this conversation someone's going to bring up crypto currencies now crypto currencies  is something that everyone wants to talk about but no one really knows how they work. Today I'm going to fix that, since man world currency has been a very important part of our lives in the caveman era they use the barter system now the barter system involves goods and services being exchanged among each other so now,' we have a situation where a caveman is exchanging seven apples and getting oranges in return now the barter system fell out of use because it had some glaring flaws now these flaws include having people's requirements coincide for example say you have 5 apples and your friend has five oranges you want some of his oranges now until and unless your friend has a requirement for the apples that you own he'll not be ready to make an exchange for it there's no common measure of value now since there's no common measure in terms of which value of a commodity can be expressed there's a problem when you have to decide how many apples you are ready to trade for one orange or a mango not all codes can be divided or subdivided for example you can divide a live animal into different smaller units the goods cannot be transported easily now unlike our modern currency fits in your wallet or your mobile phone the goods that you own cannot be taken with you everywhere you go after realizing that the barter system then work very well currency went through a few iterations in 110 BC an official currency was minted in thousand 250 AD gold plated Florence was introduced and this was used across Europe and from 1680 to 1980 paper currency gained widespread popularity and was used across the world this is how modern currency as we know it came into existence modern currency included paper currency and coins credit cards and digital wallets for example you have Apple pay, Amazon pay, pay, DM, Pay Pal and so on all of this was controlled by banks and governments now this means that there was a centralized regulatory  authority the delimited how paper currency and credit cards worked now imagine the scenario of doing an online transaction here you're thanking your friend for paying for your lunch are you saying that you're sending the money to their account now this transaction takes place successfully but there are several ways where this could have gone wrong they could have been a technical issue at the bank for example the systems could have been the machines weren't working properly and so on that means there's a central point of failure which is the bank the users accounts could have gotten hacked for example they could have been a DDoS  attack or identity theft and so on or the transfer limits for that account were exceeded this is why the future of currency lies with cryptocurrency now imagine the transaction between two people in the future one of them has the Bitcoin app and there's a notification  asking whether they sure they're ready to transfer five bitcoins if yes processing takes place here we're authenticating the users identity checking whether they have the required balance to make that transaction and other things now after that's done the payment is transferred and the payment is received all of this happens in the matter of minutes and is as simple as that this in turn removes all the problems of modern banking there's no limits to the funds you can transfer your accounts cannot be hacked and there's no central point of failure now as of 2018 there's more than 1,600 cryptocurrencies available now there are some popular ones like Bitcoin litecoin it's Harry amends each cash and a new cryptocurrency crops up every single day now considering how much growth they're having at the moment there's a good chance there's plenty more to come in the upcoming years so what exactly is cryptocurrency a cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange now cryptocurrency is quite similar to real-world currency just that it does not have any physical embodiment it also uses cryptography to work the way it does now some of the features of cryptocurrency are that there's a limit to how many units can exist with Bitcoin this limit exists at 21 million now after this no more bitcoins will be  produced you can easily verify the transfer of funds now the hashing algorithms that Bitcoin uses makes it very easy for users to determine whether a transaction is valid or not they operate independent of a bank or a central authority they work in a decentralized manner now new units can be added only after certain conditions are met for example for Bitcoin only after block has been added to the blockchain will the miner be rewarded with bitcoins and this is the only way new bitcoins can be generated so what makes cryptocurrency so special firstly there's little to no transaction costs now if you use the digital wallet you'll know that if you're transferring money from your wallet to your bank account you lose some amount of money you have 24/7 access to money you can't just walk up to your bank at 3 a.m. morning and say that you want to withdraw some money there's no limits on purchases and Madras there's freedom for anyone to use for example if you are setting up an account in your bank you need to do some amount of paperwork and documentation with cryptocurrencies all of that can be avoided international transactions are faster the wire transfers take about half a day to transfer money from one place to another but with cryptocurrencies it only takes a matter of minutes or seconds what's the crypto in  cryptocurrencies crypto navistick or Prague Rafi it's a method of using encryption and decryption to secure communication in the presence of third parties with ill intent now this refers to third parties who want to steal your data or want to eavesdrop on your conversation cryptography uses computational algorithms like sha-256 which is the hashing algorithm that Bitcoin uses a public key which is like a digital identity of the user with he shares with everyone and a private key which is a digital signature of the user which he keeps hidden now let's talk about a normal Bitcoin transaction first you have the transaction details now this details who you want to send it to and how much bitcoins you want to send them then it's passed through a hashing algorithm for Bitcoin we use the sha-256 algorithm the output that you obtain is passed through a signature algorithm with the users private key now this is used to uniquely identify the user this output is then distributed across the network for people to verify this is done by using the sender's public key the people who verify the transaction to check whether it's valid or not unknown as - now after this is done the transaction and several others are added to the blockchain where it cannot be 

changed again if the concepts of hashing 

seem a little difficult to you I would 

suggest you

 watch the blockchain explain 

video so that you can understand better 

now the sha-256 algorithm like I told 

you earlier looks something like this 

now seeing how complicated it looks i'm 

sure it's safe to say that the 

encryption is very difficult to hack 

today we will be focusing on two major 

crypto currencies Bitcoin and ether.

Now 

bitcoin is a digital currency that is 

decentralized and works on the 

blockchain technology it uses a 

peer-to-peer network to perform 

transactions let's talk about ether 

ether is a currency that's accepted in 

the etherium Network now the etherium 

network uses blockchain technology to 

border: 0px; cursor: pointer; display: inline; letter-spacing: 0.3px; margin: 0px; padding: 0px; text-align: left;" tabindex="0">create an open-source platform for building and deploying decentralized 

applications now let's talk about the 

similarities 

VidCon and ether they are the biggest 

and most valuable cryptocurrencies in 

the market right now both of them use 

blockchain technology which is nothing 

but a technology that involves 

transactions being added to a container 

called bloc and creating a chain of 

blocks in which data cannot be altered 

currency is mine using a method called 

proof-of-work which is a form of 

mathematical puzzle that needs to be 

solved before a block can be added to 

the blockchain finally these are widely 

used across the world now let's talk 

about the differences with Bitcoin it is 

used to send money to someone this is 

very similar to how real-life currency 

works with ether it is used as a 

currency within the etherium Network 

although it can be used for real-life 

transactions as well Bitcoin 

transactions are manual which means you 

have to personally perform these 

transactions with ether you have the 

option to make these transactions manual 

or automatic or programmable which means 

that these transactions will take place 

when a certain conditions been met for 

Bitcoin it takes 10 minutes to perform a 

transaction which is the amount of time i

t takes for a block to be added to the 

block chain with ether it takes about 20 

seconds to do a transaction no 

block chain is used like money for real 

my transactions and ether is used to 

power the etherium network and power 

real-life transactions as well ether is 

used as fuel within the etherium network 

to power both of these things now there 

is a limit to how many bitcoins can 

exist which is 21 million we supposed to 

hit this number by the year 2140 

ether is expected to be around for a 

while but not to exceed 100 million 

units the Bitcoin is used for 

transactions involving goods and 

services and ether uses block chain 

technology to create a ledger to trigger 

a transaction when a certain condition 

is met for Bitcoin we use an algorithm 

called associate 256 for hashing and 

with a theorem we use eg hash as of July 

23rd 2018 one Bitcoin equals seven 

thousand six hundred sixty eight dollars 

for ether it costs four hundred and 

sixty four dollars now what's the future 

of cryptocurrencies 

the whole world is clearly divided when 

it comes to cryptocurrencies 

on one side you have supporters like 

Bill Gates, Al Gore and Richard Branson 

who say that cryptocurrencies are better 

than regular currencies on the other 

side we have people completely against 

it people like Warren Buffet, Paul 

Krugman and Richard Schiller who are 

both Nobel Prize winners in the field of 

economics they call it a Ponzi scheme 

and means for criminal 

in the future there's going to be a 

conflict between regulation and 

anonymity since several cryptocurrencies 

have been linked with terrorist attacks 

governments would want to regulate how 

cryptocurrencies work on the other hand 

the main emphasis of cryptocurrencies 

is to ensure that their users are kept 

anonymous by the year 2030 

cryptocurrencies would occupy 25% of 

national currencies which means the 

significant chunk of the world would 

start believing in cryptocurrency as a 

mode of transaction it's going to be 

increasingly accepted by merchants and 

customers and it will continue to have a 

volatile nature which means prices will 

continue to fluctuate like they have 

been for the last few years.