Cryptocurrency (i.e. Bitcoin) explained | School of Block
Heard about Blockchain and Cryptocurrency and that got you excited You will say this is the future of money and tell all your friends about it but they are a little skeptical as they might ask “What is cryptocurrency anyway?” You throw a bucket of buzzwords It's decentralized Fiat Money printer A consensus And before you know it they're gone They 're convinced you're crazy But don't be afraid You're not crazy In this episode we'll show you exactly how crazy you are and give these friends something to think Are you ready? It's School of Block time before we can properly understand cryptocurrency It 's helpful to understand in the first place what a currency is and you're lucky we made a whole video about it already So enjoy this joyful feast: "What is money " Which you can find here and if you've already seen it let's get to it now, of course there are some technical differences between currency and money primarily with one being an intangible concept and the other being the physical item we use to deal with it but essentially currency is a medium of exchange and a good currency is A currency that is accepted by all parties in a given system It is also divisible Durable verifiable Exchangeable non-inflationary Portable and portable How does the US dollar perform the euro or pound when judged by these criteria These traditional currencies are all we have had for hundreds of years so we learned a kind Accepting its flaws of counterfeiting and theft is at the top of the list, for centuries , but the most pressing flaw in the post-pandemic world yes inflation.
Not only that, but there is a lot of friction in our use of those currencies and brokers always take their share whether it's bank fees, visa expenses Or MasterCard or even foreign exchange rates that constantly grind the value you put into the system so there has been a long gap in the market for a safe, smooth, non-inflationary and acceptable currency in the c It's funny that there are thousands of them already but not all of them have passed the first and most important test to be an acceptable medium of exchange now one of the newcomers is starting to get into this and get a lot of interest as a result yes your guess is right bitcoin and if a cryptocurrency can It opens the door for a lot of cryptocurrencies to follow Most cryptocurrencies are built on open source software which is great for innovation and means anyone can participate, yes even small gamers “without permission” literally means you don’t need permission These are coins governed by code and community and not Centralized institutions but this transparency and openness makes it very easy to copy so you can launch your own standalone process known as a fork in case you were wondering and that explains why there are now so many of them now over 8000 officially recognized compared to the 180 fiat currencies that are known.
Many of them were actually dead or just meme coins but among the legitimate versions of them there are huge differences between them on a philosophical level, technology and governance Well, try to understand a little But at the most basic level most of them share the same basic features so let's start by defining a cryptocurrency is a digital or virtual currency that is secured by cryptography making it nearly impossible to forge or double spend so how does this work? You've probably heard of a ledger before. It's a simple balance sheet that records the flow of money and is usually placed in a vault that only one person can access. Now imagine a ledger containing every transaction made in the currency of your choice , not just one copy, but hundreds of thousands of mirrors. From this ledger stored all over the world and in addition to this general ledger anyone anywhere can view it You can host a copy yourself and earn rewards for doing so Each new transaction must be approved and verified against all existing copies before it is accepted as a matter of record This is known as a ledger Distributed Ledger In other words it is distributed across many different computers and is the basic infrastructure that makes cryptocurrency work One of the hardest problems a digital currency has to solve is the double-spend problem Here's how to think about it Imagine he just sent you the most funny cat memes and you desperately want Share it with all your friends hahahaha you get a copy and you get a copy take a copy and you are a copy and you are a copy everyone gets one copy of the benefits and of course one of the money problems The digital roll is how easy it can be copied so when I send a copy it's actually a copy of the original the future now has an exact copy of the copy you sent so instead of one there are two now obviously if the money was just a digital file and you started to share it digitally then…well you You get a hundred and you get a hundred and that's the double-spend problem.
If money can be sent as a picture is sent, I can spend it twice or an infinite number of times to infinity and beyond . Digital is a wonderful river of motion that lets everything go wherever it wants to solve a problem. Double spending is like trying to stop a tsunami with a toothpick but that is exactly what Satoshi did in the Bitcoin white paper and it is one of the most important principles behind the accuracy of bitcoins as a digital currency. Transactions A timestamp server was inside a completely deep peer-to-peer network until Satoshi's innovation Double spending was the Achilles heel of digital currency transactions and it was simply not possible for a digital system to Proving that two or more different people did not spend the same digital money without using an intermediary Despite advances in payment technologies and services, all online transactions still require a trusted third party such as a government, bank or credit card company, not yet another specific feature of cryptocurrencies. is that it is not generally issued by any central authority but rather is managed by thousands of individual stakeholders who operate the computers that secure the network and receive the original token as a reward in this case Bitcoin This is generally known as mining but you may hear about caching Or agriculture too We will watch more in the future movie So what are the advantages of cryptocurrencies well There are few of them in theory They are immune from government interference or manipulation They are frictionless, there are no intermediaries that put their fingers in your pie and you do not need a bank to manage your money, they are completely under your control Wire transfers International is ice loot compared to the high speed and low cost of global cryptocurrencies No one can spend the same money twice Most cryptocurrencies are transparent with Blockchain being global Their transactions are publicly viewable and they are proven scarce, making them inflation-resistant .
In the case of Bitcoin, the savings are limited to 21 million. There would be no more than this than Bitcoin now. If all this is true and it is, then why do cryptocurrencies look so scary! I'm going to quote from John Oliver Cryptocurrencies are everything you don't know about money combined with everything you don't know about computers that's a lot of "I don't know" but here's the magic You don't actually need to understand technology to use it You probably don't understand how the Internet gets to your home but This does not prevent you from taking advantage of high-speed broadband but like the Internet, security is a major concern in the Blockchain, the code is new and because we are talking about money here it is a bait for hackers Self-hosting a crypto wallet could also easily lead to human error and there is no doubt that the fluctuations of The market can be brutal We're doomed! But we're just starting to see the emergence of simpler, less volatile products like stablecoins, indices, and hardware wallets.
You don't have to be Nostradamus to see that physical money is dying and this has been accelerated even further by the global pandemic. I don't remember touching physical money even once in the last year with cash. Considering that now, if the value of your hard-earned currency is eroding with every batch of monetary easing from the central bank, don't you think it's time to start looking at money in a different way? Cryptocurrencies are not the best solution, but they are already being adopted by more and more institutions for the same The reasons why they embraced gold earlier This alone is indicative that things are changing You have been watching
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