Crypto-currency & roller coaster

Last two months have been crazy. No I am not speaking about the corona virus but the cryptocurrency that has been making tides turning millions richer and millions poorer. A positive tweet from Elon Musk is sending meme-coins into the moon while an otherwise tweet is wiping billions out from the crypto-currency. Is this a serious video game with real life games? Lets look at what a crypto-currency is , why was it created and how can you invest in the crypto-currency.

Crypto currency
Photo by Tech Daily on Unsplash

Mysterious Start of Crypto-currency — Bitcoin

Story of the crypto-currency was a mystery especially at its start. Crypto-currency was first published as a white paper penned under a pseudo name of Satoshi Nakamoto. The first ever cryptocurrency to be invented was the bitcoin. This was created by the same mysterious man or rather a group of men with an idea to bring about an alternate to the fiat currency.

Bitcoin Mining, Exchange and BlockChain Technology

Bitcoin relied on the technology of the Block chain technology. Block chain technology is just a chain of blocks which has some value stored in it. By the time the technology uses a distribution of blocks and ledgers to ensure the transactions are in place and they are also highly secured. The term mining was used to refer to the creation or rather procuring the reward in terms of bitcoin for solving the complex equations. For instance, the founder of bitcoin, Satoshi, had mined the genesis block and got a reward of 50 bitcoins . Over time it was said that he had minted around 10 million bitcoins and then he gave to other developers. The first noticeable exchange of bitcoin for value was done when one of these bitcoin holders offered a 10,000 bitcoins in exchange for the 2 pizzas. (420 million dollars in today’s value of bitcoin…. better be that pizza was tasting like gold)This was the first instance where the transaction of Bitcoin took place. The mining also had a concept where the complex equations got even harder as they crack and also it will ensure only a finite supply of coins are in the circulation

Photo by Pierre Borthiry on Unsplash

Success of Crypto-Currency

Initially the bitcoin had its own issue. For example, the hackers found a bug in code where they initially minted 184 billion bitcoins. But later they were sorted out. Fortunately, this was the only issue that was found in the bitcoin since the start of it. The success of the bitcoin then spread owing to a lot of factors of which cryptography, decentralisation, private keys formed the pillars its success.

Cryptography is the security provided by the system to encrypt the data and reduce the data theft or manipulation. It also has a unique feature called as the Public ledger where the transaction of all the bitcoins are being updated in all the systems of the world. This ensures that even if one node ( or one computer is hacked and manipulated for values, that doesn’t reflect in the all other systems thereby making it impossible for hacking. Decentralisation is the concept where there is no main node ( like say bank ) which centrally controls the whole of bitcoin system. This ensures that there is more peer to peer transaction as well as no dependency on any institution for its supply. The private key is like your system password which is like a gateway to your bitcoin access. They key holder is the real owner of the bitcoins. Hence unique IDs are created to ensure that security is at atmost level for the owners. Without the private key the bitcoin owner cannot transact or exchange for bitcoins.

The Purpose , Copy-cats and not-so-useful (memecoins)

While we may think how are the cryptocurrency useful for? the answer to be honest was anonymous Dark web purchases. Yes you read it right the main usage of the bitcoins were to purchase illegal items on the dark web. Infact almost half of the bitcoins in circulation are estimated to be in the dark web purchases. However, the purpose of the crypto was to create a decentralised form of currency. While that is the case for the bitcoins, another high value coin called as Ethereum also has its own purpose. It uses the smart contracts technology. The smart contract is a specific set of code or features where the payment is made when a certain condition is met and the buyer’s money reaches a decentralised place while the contract is in place. If the contract is successful the coin reaches the ethereum buyer where as the vice versa if it fails.

The crypto-space has also however seen some not so useful coins in the circulation. The doge coin , that was created as a joke / meme in 2013, is now sky-rocketing towards the moon ( propelled by a real life Iron Man) while they serve no purpose and there will be billions of coins without any intrinsic value.

Photo by Clay Banks on Unsplash

How to buy or trade one and conclusion

With the ROI of crypto reaching greater heights, now more and more people are rushing to catch a part of their favourite cryptocurrency. There are many exchange sites where you could exchange fiats and buy cryptos or trade one another for profits. The international exchanges include populars such as Crypto.com, Bitmart, Binance and other relevant sites. Ones in India can also use desi platforms such as Giottus and WazirX where they can trade and deposit in INR. However, all would ask for the verification where we need to produce proof such as govt ID as well as bank accounts with which the trades shall take place.

While there are many advantages of the crypto-currency its future must not be determined by what it was first used in the mart — Illegal purchases. They too have their own purpose and solves or eases the complex problems such as banking and finance transfer through their own futuristic visions and techs.

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Yeshwant V

Yeshwant V

Ambivert | Mechanical Engineer | Epistemophile | Content speaks …. Always…