Today, cryptocurrencies have become a global phenomenon known to almost every country around the globe. They are a virtual or digital currency designed to work as a medium of exchange. They use cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Cryptocurrencies are essentially limited entries in a database that no one can change unless specific conditions are fulfilled.
During the 1990s tech boom, there have been numerous attempts at creating a digital currency, but all of them failed. There were many different reasons for their failures, such as fraud, financial problems and even frictions between companies’ employees and their bosses.
In particular, those 90s systems utilised a third party approach. This means that the companies behind them verified and facilitated the transactions. Due to the failures of these companies, the creation of a digital cash system was seen as a lost cause for a long while.
Then in 2009, a group of programmers under Satoshi Nakamoto introduced Bitcoin. The difference is that Bitcoin is completely decentralised, like a ‘peer-to-peer electronic cash system.’ This means it has no servers involved and no central controlling authority.
However, double-spending has been one of the major issues that any payment system has to solve. What is double-spending? It is a fraudulent way of spending the same amount twice. Traditionally, the solution was to have a third party central system, but this did not solve the problems.
The blockchain technology has been one of the reasons why Bitcoin is the most popular cryptocurrency today. The blockchain allows for a distributed ledger, a design that minimizes trust in a single entity, and distributes the storage of data across “blocks” in a network.
Despite Bitcoin’s success over the past few years, a recent report from The West suggests that Facebook’s Libra cryptocurrency can possibly beat Bitcoin. Read the full report here: https://thewest.com.au/business/barefoot-investor-where-to-save-on-home-loans-tips-and-tricks-to-get-what-you-want-ng-856cba9c43acf7a46a31605c80fb3bb6