Introduction to Cryptocurrencies and Blockchain

Introduction to Cryptocurrencies and Blockchain

What is Blockchain? 

Blockchain is the technology that runs Bitcoin. Before understanding Blockchain and Bitcoin, let me take you through the issues we face in the current banking systems. Banks charge huge transaction fees, fake currencies create the problem of double spending, there is a long time involved in banking and finally banks can collapse any time such as the 2008 financial crisis. Digital wallets such as PayPal, Citrus and Paytm solve some of these issues, they allow us instant transfers nevertheless they are still dependent on banks. Bitcoin was the first system to solve all these issues. It is the revolutionary cryptocurrency which is a digital payment system running on the Blockchain technology. Bitcoin has the following features – no transaction fees are required, all transactions are completed within minutes, it is decentralized in that no one person owns the Blockchain network, it can never be manipulated or hacked because of the basic structure of a Blockchain. Let me now show you a simple Bitcoin transaction, we have James who wants to send 500 bitcoins to Kevin. This transaction is verified by miners Lisa and Robert, they then start a race to solve a complex mathematical puzzle called Proof of Work. Suppose Lisa here solves it first she adds her block containing the transaction to the existing Blockchain. She is given 12.5 Bitcoins as a reward. This is what we call as Bitcoin mining. Blockchain is a public distributed database holding encrypted ledgers. This means a block is the current part of a Blockchain which records the recent transactions. Once it is verified it becomes a permanent part of the growing Blockchain. Blockchain run some three important technologies – distributed machines on the peer-to-peer network help in maintaining the consistency of the public ledger, Blockchain uses private key cryptography to secure identities and hash functions to make the Blockchain immutable, the mathematical principle of proof-of-work ensures that the nodes automatically and continuously agree to the current state of the ledger. Now that we have understood the basic concepts, let us explore a few of the real-life applications of Blockchain. Follow my vote aims to change the way we vote becoming the world's first open source online voting solution. Arcade City is the groundwork for a true decentralized ride-sharing service often called uber killer.

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