Cryptocurrency & Blockchain

Today we have a look at what is a cryptocurrency, what blockchain is, how does it link to a cryptocurrency! So let's dive straight into cryptocurrency and see what it is!

 Very well defined at Wikipedia "A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.", but is it actually is in even simpler language "A cryptocurrency is a digital currency that is created and managed through the use of advanced encryption techniques."

 A few keywords that you might need to know when talking about cryptocurrency are as follows: 
  • Wallet - a place to store your cryptocurrency credentials: namely your private key 
  • Private key - a 256-bit number, expressed as a hexadecimal 
    • Eg: 9873D79C6D87DC0FB6A5778633389F4453213303DA61F20BD67FC233AA3326
  •  When people say that they have lost their cryptocurrency(say Bitcoin), they mean that they lost the private key 
  • Examples of cryptocurrency
    • Bitcoin
    • Ether
    • Litecoin
  • Current rates of these cryptocurrencies (Prices as on 11/3/2019)
    • 1 Bitcoin = $9180.00
    • 1 Ether = $181.37
    • 1 Litecoin = $57.73
Note: Private keys are generated using cryptography 

 FunFact: Higher Price of Cryptocurrency doesn't directly link to the profitability of that particular cryptocurrency over the other.

 Now, as we know the basics of cryptocurrency let's see how dive into the technology which makes cryptocurrency a reality - Blockchain.

 What is Blockchain?
We again look at 2 definitions for Blockchain, one from Wikipedia and one wieldy one.

 Wikipedia defines Blockchain as " It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks."

 The easy one: It's a linked list

The lexicon update for Blockchain is as follows:
  • Linked list
    • A linear collection of data elements such that each element contains a pointer that points to the next
  • Pointer
    • A language object that stores the memory address of another value located in computer memory
  • Hash Function
    • Takes an input of (virtually) any size and returns an output of a fixed size 
    • Encrypted via SHA256 – output is 256-bit / 32 byte
  • Hash Pointer
    • A hash pointer is the hash function applied to the previous entry when it was created
For now, that's all for the Cryptocurrency and Blockchain part. In the next blog, I'll add more on the Blockchain side - how it works, what is bitcoin mining, what are the kind of attacks such as The Double Spent Attack, what is the proof of work and much more.

I hope you had a good read!

Next Blog: Blockchain workflow and challenges 

Till then,
Happy Blogging






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