Cryptocurrency: The Art and The Science
By Tokenfolio on Altcoin Academy
Cryptocurrency isn’t complicated — except when it is. Learn the ins and outs of bitcoin and blockchains in this step-by-step breakdown of the system powering the cyber economy.
Ready?
Cryptocurrency isn’t rocket science. It is trading one type of currency for another, yes — but if that’s all there was to it, we wouldn’t be here today, would we?
As in traditional securities markets, owners of cryptocurrency transfer, purchase, and trade electronic currencies called tokens. But that’s where the resemblance stops. The cryptocurrency market is decentralized, and that’s what gives crypto its superpowers. Where all the New York Stock Exchange’s (NYSE) transactions pass through central banking authorities, cryptocurrency has no central authority and no middle man — just every user accountable to every other user. It is a system that depends on and is maintained by distributed consensus, meaning that there is one ledger for everyone’s transactions and that everyone can see every entry.
Also, cryptocurrency is a finite resource by design — it’s public from the beginning of how much of a new currency will be produced. So where Wall Street security traders can maneuver traditional currency through the cracks of trading law or governments artificially inflate their currency to keep economies afloat, cryptocurrency cannot be faked, inflated or destroyed.
(It can be stolen, but that’s a topic for another article.)
For a world commonly associated with the black market and the darkweb, cryptocurrency is itself remarkably open. And that openness itself brings in proportionately more oversight. When cryptocurrency took out the middleman, every user became a potential watchdog.
This has been a self-sustaining, self-regulating, and self-improving system because it is a system reliant on people’s natural distrust. Would you trust that another user has only the best intentions towards you and your money? No. Nor does any cryptocurrency owner trust another, keeping everyone checking and double-checking and triple-checking the ledger, or blockchain.
Token types within blockchains can be traded freely and quickly, but converting from one block to another brings some hassles because it’s another set of hoops users have to jump through. Some people are into that, but for now, let’s stay in the realm of a single block.
Each block offers rewards to miners within its borders for verifying transactions, securing software, and maintaining the hardware the block’s information is on. Paper records can be lost, destroyed, or falsified, but blockchain transactions are irreversible once they’re confirmed, so miners are in a constant arms race against each other to keep the system open, secure, and improving.
Complicated, yes?
That’s why we created Tokenfolio — to streamline the trading process and make cryptocurrency actually accessible. Dive in to our website, or see our previous article for a step-by-step look at what makes our platform unique.
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Peace!
