Difference between revisions of "Cybercurrency"

Revision as of 21:27, 13 March 2019 (view source) Mrsiegel (Talk | contribs) ← Older edit		Revision as of 21:28, 13 March 2019 (view source) Mrsiegel (Talk | contribs) Newer edit →
Line 7:		Line 7:
	In order to send money, you broadcast to the network how much money you want to send from your account to another user’s account and then both ledgers are updated. In order to check the authentication of the transaction, before it goes through, a digital signature is required. Each account comes with a private key, and then with the transaction message, the digital signature is created. A new digital signature is created every single time a transaction goes through in order to strengthen the security. As new transactions are created they go into a pool of public transactions and then are moved into a chain to select the order in which they are processed. The order is selected in a somewhat mathematical lottery.		In order to send money, you broadcast to the network how much money you want to send from your account to another user’s account and then both ledgers are updated. In order to check the authentication of the transaction, before it goes through, a digital signature is required. Each account comes with a private key, and then with the transaction message, the digital signature is created. A new digital signature is created every single time a transaction goes through in order to strengthen the security. As new transactions are created they go into a pool of public transactions and then are moved into a chain to select the order in which they are processed. The order is selected in a somewhat mathematical lottery.
−	==Trading Vs. Mining==	+	===Trading Vs. Mining===
	Cryptocurrency mining is adding transactions to the blockchain and releasing new currency. Adding transactions to the blockchain means securing and verifying the transactions. In order to mine, people must have a computer with a special program, and significant computer resources overall. On the other hand, cryptocurrency trading is exchanging one cryptocurrency for another and buying and selling coins. There are two types of trading – margin and leverage. Margin trading		Cryptocurrency mining is adding transactions to the blockchain and releasing new currency. Adding transactions to the blockchain means securing and verifying the transactions. In order to mine, people must have a computer with a special program, and significant computer resources overall. On the other hand, cryptocurrency trading is exchanging one cryptocurrency for another and buying and selling coins. There are two types of trading – margin and leverage. Margin trading

---

Revision as of 21:28, 13 March 2019

ybercurrency, commonly referred to as cryptocurrency, is digital assets that use cryptography to ensure the security of the online transactions. ^[1] One of the main aspects of cybercurrency that sets it apart is that it allows people to not have to rely on central banks and their services. While baking institutions suffer from cyberattacks quite often, cybercurrencies do not due to their strong security through technologies such as blockchain. Cryptocurrencies can also be a very risky investment because the price of a coin can change drastically in a short span of time due to trends in the financial market. Cybercurrency does not have value in the real world, they only have value because people are willing to trade goods and services for it in the real world.

Background

In 2009, cybercurrency began, but only after a mysterious paper written in 2008 about an “Electronic Cash System” called Bitcoin. The author of this paper is still an unknown identity, but this is what sparked the creation after many people in years prior had attempted to create online currencies but failed. Bitcoin was the first cybercurrency to become available to the public. It wasn’t until 2011 that many alternative, rival cybercurrencies came about as improved versions of Bitcoin’s source code.

How it works

In order to send money, you broadcast to the network how much money you want to send from your account to another user’s account and then both ledgers are updated. In order to check the authentication of the transaction, before it goes through, a digital signature is required. Each account comes with a private key, and then with the transaction message, the digital signature is created. A new digital signature is created every single time a transaction goes through in order to strengthen the security. As new transactions are created they go into a pool of public transactions and then are moved into a chain to select the order in which they are processed. The order is selected in a somewhat mathematical lottery.

Trading Vs. Mining

Cryptocurrency mining is adding transactions to the blockchain and releasing new currency. Adding transactions to the blockchain means securing and verifying the transactions. In order to mine, people must have a computer with a special program, and significant computer resources overall. On the other hand, cryptocurrency trading is exchanging one cryptocurrency for another and buying and selling coins. There are two types of trading – margin and leverage. Margin trading

Technology

Ledger

Ledgers are not owned by a specific individual, instead they are self-run. Every cybercurrency has a ledger in order for the public to be able to see all transactions that have been made. This serves as somewhat of an equalizer because it forces everyone to be truthful and do the right thing because everyone can see their actions.

Blockchain

Blockchain was originally created for cybercurrency but is now used in several different aspects of technology. It is basically a digital spreadsheet that is duplicated to computers thousands of computers within the network. This network has been designed to regularly update and automatically check in on the database every ten minutes is designed to regularly update the spreadsheet. One of the most unique aspects of blockchain is that information shared on the blockchain exists as a shared and regulated database. In addition, blockchain makes sure that people are not using the same cybercurrency for more than one transaction. Blockchain essentially takes out the middle man and allows consumers to connect directly.

Types

Bitcoin

Bitcoin was the first cybercurrency and was created in 2009, but the creator is still anonymous. The creator went by the name of Satoshi Nakamoto, but it is apparent that this was not his real identity. Nakamoto mined the first bitcoin and embedded in the bitcoin was the date, January 3, 2009, which is now believed to be the date of the first ever mined bitcoin. It was not until May 2010 that bitcoin was used to make a purchase by Laszlo Hanyecz. Hanyecz paid for a pizza with 10,000 bitcoins and now this day is known within the bitcoin community as Bitcoin Pizza Day.

Litecoin

Ether

Unobtanium

Issues

Although decentralization from the financial institutions often seen as a very positive aspect of cybercurrency, the lack of authority overseeing it can cause some issues. All of the responsibility is placed on the user. Users have a responsibility to be truthful and work as somewhat of a community. In addition, all transactions within cybercurrency are irreversible, therefore there must be some sort of trust between people involved.

Price Manipulation & Whales

The volatility in cybercurrency prices seems to be a growing issue due to the fact that some tradable assets have dropped by nearly 49% in just 24 hours. It causes the cybercurrency market to be very risky and not completely trustworthy. A large part of this volatility stems from whales. Whales refers to people who have a significant amount of cryptocurrency holdings who have the ability to sway the cybercurrency market by manipulating the prices.

Illegal Markets

Contributes to illegal acts and illegal markets – Silk market

Future

1. ↑ Article in Minyanville