We are all aware that there is a revolution going on in the world of cryptocurrency and blockchain technology. This revolution has been called “Crypto” or “Blockchain.” It is a new way to transfer money without any third-party involvement. In this article, we will discuss the ultimate revolution of the crypto network:
What Is Cryptocurrency?
In simple words, it is a digital currency that can be used for online transactions. Satoshi Nakamoto first introduced it in 2008. Bitcoin is of its kind and most popular form of cryptocurrency.
How Does Blockchain Technology Work?
In simple words, blockchain technology works like a distributed ledger. A blockchain is a continuously growing list of records (blocks) linked together using cryptography. Each block typically contains a cryptographic hash pointer and links to previous blocks, forming a chain. A blockchain is an open, distributed ledger that can efficiently record transactions between two parties verifiable and permanent. The information regarding each transaction is spread across all nodes participating in the network rather than being centralized in one location. Since every node has a copy of the full history of transactions, they can verify and validate them instantly. A blockchain database cannot lie. Once data is entered into it, it stays forever. There is no need to trust anyone. All you have to do is follow the rules set up by the protocol.
Why Use Blockchain Technology?
There are TOP 10 advantages of using blockchain technology. Some of them are listed below:
Every single change made in the system is recorded permanently in the Blockchain. So, if something goes wrong with the system, it becomes very easy to find out what went wrong.
Since everything is stored in the public domain, everyone can see what is happening at any given time. No one can hide anything from others.
It provides security against hacking and fraud because it does not require a central authority.
It allows users to make their own decisions. They don’t have to rely on someone else for making decisions.
It makes it possible for different networks to communicate with each other.
- Low cost
You don’t have to pay any fees when you use blockchain technology. You only pay for the electricity required to run your computer.
- User friendly
Anyone can easily understand how things work. Anyone can join the network and start using it.
All the information is shared among all participants in the network.
- High performance
It is very fast. It can process hundreds of thousands of transactions per second. It makes it suitable for real-time applications.
- Easy to scale
Because of its decentralized nature, it is easier to grow and expand.
Cryptocurrencies are also known as cryptocurrencies or virtual currencies. It is a digital asset designed to work as a medium of exchange. It uses encryption techniques to secure financial transactions, control the creation of additional units, and verify the transfer of assets. These cryptocurrencies are further categorized based on their underlying technologies such as Proof of Work (PoW), Proof of Stake (PoS), Delegated Proof of Stake (DPoS), etc. Let us discuss some popular cryptocurrencies in detail.
It is the first decentralized cryptocurrency. It is a peer-to-peer electronic cash system. Its main features include;
- Peer-to-Peer Transaction Process
- Digital Asset
- Secure Transactions
Bitcoin is used to send money online. Bitcoins are created through a complex algorithm called mining. Mining involves solving mathematical problems which require high computing power. Miners get rewarded with new bitcoins for verifying transactions.
It is the world’s 2nd largest cryptocurrency after bitcoin. It is a decentralized platform that runs smart contracts. Smart contracts allow developers to write down rules for automatically executed agreements between two parties efficiently without going through third-party intermediaries. Ethereum has its unit of currency named ether. Ether can be converted into bitcoin. In addition to this, Ethereum also offers its programming language. Developers can build DApps (Decentralized Applications) on top of Ethereum’s network.
Ripple is an open-source distributed payment protocol. It enables banks to settle payments across borders instantly. Banks no longer need to wait days or weeks to clear international payments. It supports cross-border transfers in less than one day. Ripple is similar to SWIFT but operates at much lower costs.
Litecoin was founded by Charlie Lee, the former CTO of Coinbase. It is a peer-to-peer Internet currency project based on the Scrypt hashing function. It was released in 2011 as open-source software. Litecoin is faster than bitcoin because it uses smaller blocks and fewer confirmations. Litecoin is cheaper to use than bitcoin.
Dash is a privacy-centric coin. It aims to solve scalability issues faced by other coins. It allows instant transactions using private transactions. It does not keep any record of previous transactions. All transactions are anonymous.
Monero is a highly scalable coin. It is more efficient compared to other coins. It is also more private due to its Ring Signatures technology. Monero transactions are untraceable and confidential.
Zcash is another open-source privacy-centric coin. Like Monero, it leverages zero-knowledge proofs to protect user identities. It is more advanced than Monero.
IOTA is a distributed ledger technology (DLT). It is similar to Blockchain, except it doesn’t have a central server. The tangle structure of IOTA makes it different from Blockchain. This property makes IOTA a great fit for machine-to-machine interactions.