Читать книгу The Book about Cryptocurrency №1. Second edition expanded - Viacheslav Nosko - Страница 7

This industry is a newcomer among other types of economies, businesses, and human hobbies. It was in 2008 that bitcoin.org was officially registered and the first coins appeared.

However, as much hype as appeared around the crypto from the very first years of its existence, perhaps, was not with any other instrument in the field of finance and mutual settlements.

If you look into the essence of the term, its roots go back to the Greek language. Translated from the language of Antiquity (Greek) kryptos means «secret, hidden». Cryptocurrencies work thanks to data encryption technology, or cryptography.

Distinguishing characteristics of cryptocurrencies:

• decentralized data that is stored on multiple computers at the same time;

• anonymity (you don’t know who transferred money to you, you don’t know who owns the wallet where you transfer money);

• security (the record of the transaction cannot be forged or changed).

We believe that cryptocurrencies are the new generation of assets that will change our lives.

Although there are still many skeptics who believe that the value of bitcoin and other coins is exaggerated, that their rate will sooner or later collapse, that this money is useless…

This is normal resistance to the new. Once people did not believe in bank cards and were afraid of ATMs. Once upon a time, a smartphone with its simple functions seemed like science fiction. But a little more time will pass – and cryptocurrencies will become a familiar means of payment for all segments of the population.

This book, among other things, will help you understand the essence of new money, learn how to handle them and not lose your blood fiat money on cryptocurrency transactions. But about that next…

The revolutionary feature of cryptocurrencies is that transactions take place directly between users, without the involvement of anyone else.

For example, if you want to order a memory card for your phone or a trendy t-shirt on Aliexpress, you will need a bank card to pay for it. Thus, there is an intermediary between you and the online store – the bank. Soon Aliexpress and other monsters of online commerce will accept crypto-money on par with bank cards, Webmoney and PayPal.

The basis for the development of cryptocurrencies was the invention of blockchain technology (Blockchain).

Blockchain, or «block chain» in English, is a system of distributed information storage. In the Blockchain system there is no single server where the entire database is stored, information can be simultaneously recorded on several devices.

All data in the Blockchain network is recorded in blocks that are linked to each other.

All transactions take place in the blockchain. Each transaction is written to a block and cannot be changed anymore. In order to form a new block, certain calculations must be done. That computer, which has managed to do the task, receives its reward in bitcoins. This process is called mining, and accordingly, the owners of the computers that do the calculations are miners.

The more miners there are in the world, the faster the transactions can go and the more stable the whole system is.

What is Bitcoin? It is essentially the name of a network that began operating in 2009 and which utilized Blockchain technology.

To break these concepts down, let’s define it once again:

Blockchain is a technology that can be applied to more than just cryptocurrencies; bitcoin is a cryptocurrency, the first cryptocurrency, the progenitor of all other coins and by far the most valuable of currencies.

The term «cryptocurrency» gained traction in 2011 thanks to a Forbes magazine article on Bitcoin. Subsequently, the term «cryptocurrency» began to refer to any crypto-money.

The word Bitcoin is formed from two English words: bit – unit of information and coin – coin. The literal translation into Russian is «minimal coin».

It is the first most expensive and has the largest capitalization today cryptocurrency.

The purpose of bitcoin is to create a universal global decentralized payment system that is not under the control of banks, governments and other intermediaries. Bitcoin, like other cryptocurrencies, helps to make p2p (person to person) payments.

The pros of bitcoin compared to traditional (fiat) currencies are:

● A bitcoin account can never be blocked by anyone. These are your funds forever. Only on the condition that you follow digital security techniques. We’ll talk more about security techniques later. And more than once.

● Account transactions are both anonymous and transparent. The list of transactions can be tracked in a publicly available log. It is not known who sent the money and to whom.

Unlike a classic bank account, a cryptocurrency account is not tied to personal data.

But not everything is so rosy. Bitcoin and other cryptocurrencies also have disadvantages:

● If you make a mistake with your wallet number (it’s not hard to make a mistake here – the ID of each wallet consists of 34 characters, including numbers, lowercase and uppercase letters and other characters), it will be impossible to cancel the transaction. Attention and thoroughness are the keys to success in working with cryptocurrency.

The cryptocurrency market is highly volatile due to its rapid growth and the nature of cryptocurrencies themselves. (Volatility is the level of price changes in the market. High volatility is when the price can change significantly in a short period of time). This is why inexperienced and novice crypto traders lose money, because it is very difficult to predict how the market will behave in the coming months.

If your wallet has been hacked or lost, if you have forgotten the password or passphrase of your wallet, it is impossible to get back the lost funds.