What is Cryptocurrency A Simple Explanation

What is Cryptocurrency a https 3A 2F 2Fblockgeeks com 2F a A digital or virtual currency that uses cryptography for security A cryptocurrency is difficult to counterfeit because of this security feature Cryptocurrencies have skyrocketed in value over the last few years Almost everyone has heard about Bitcoin but how many people actually know what Bitcoin is How many people know where they come from and how they work Our video Cryptocurrency Explained will tell you everything you need to know about cryptocurrencies in an easy to understand format Cryptocurrencies emerged as a side product of another invention Satoshi Nakamoto the unknown inventor of Bitcoin the first and still most important cryptocurrency never intended to invent a currency In his announcement of Bitcoin in late 2008 Satoshi said he developed A Peer-to-Peer Electronic Cash System His goal was to invent something many people failed to create before digital cash Announcing the first release of Bitcoin a new electronic cash system that uses a peer-to-peer network to prevent double-spending It s completely decentralized with no server or central authority Satoshi Nakamoto 09 January 2009 announcing Bitcoin on SourceForge The single most important part of Satoshi s invention was that he found a way to build a decentralized digital cash system In the nineties there have been many attempts to create digital money but they all failed after more than a decade of failed Trusted Third Party based systems Digicash etc they see it as a lost cause I hope they can make the distinction that this is the first time I know of that we re trying a non-trust based system Satoshi Nakamoto in an E-Mail to Dustin Trammell After seeing all the centralized attempts fail Satoshi tried to build a digital cash system without a central entity Like a Peer-to-Peer network for file sharing This decision became the birth of cryptocurrency They are the missing piece Satoshi found to realize digital cash The reason why is a bit technical and complex but if you get it you ll know more about cryptocurrencies than most people do So let s try to make it as easy as possible To realize digital cash you need a payment network with accounts balances and transaction That s easy to understand One major problem every payment network has to solve is to prevent the so-called double spending to prevent that one entity spends the same amount twice Usually this is done by a central server who keeps record about the balances In a decentralized network you don t have this server So you need every single entity of the network to do this job Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend But how can these entities keep a consensus about this records If the peers of the network disagree about only one single minor balance everything is broken They need an absolute consensus Usually you take again a central authority to declare the correct state of balances But how can you achieve consensus without a central authority Nobody did know until Satoshi emerged out of nowhere In fact nobody believed it was even possible For more blockchain guides content and videos visit us at a www blockgeeks com a

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