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What is Cryptocurrency?
Crypto is a form of digital currency that operates without the need for banks or governments. First introduced as Bitcoin (BTC) in 2008 by the mysterious Satoshi Nakamoto, Bitcoin runs on a decentralized network and was launched as open-source software in 2009. Since then, the project has been forked and thousands of alternate Cryptocurrencies have been created and released, some using the same algorithm as Bitcoin, and others on completely different algorithms and networks.
What is a consensus mechanism?
A blockchain consensus mechanism is a type of automated system that aims to accomplish two main objectives.
- Ensure a distributed, leaderless community of network validators are able to efficiently and unanimously agree on new and existing data on the blockchain ledger.
- Ensure all network validators follow the rules of the protocol and perform their roles honestly.
What is a Cryptocurrency Algorithm?
A cryptographic algorithm is a set of mathematical instructions or procedures used to encrypt and decrypt data, making it unreadable to unauthorized users. By using a cryptographic key, it transforms readable data (plaintext) into an unreadable format (ciphertext) and back again, and is fundamental to secure communication and data protection.
What is a Crypto Blockchain?
A crypto blockchain is a decentralized, digital ledger that securely and transparently records transactions, forming the technology that underpins cryptocurrencies. It consists of a growing chain of “blocks,” where each block contains a list of transactions and is linked to the previous one using cryptography. This chain is distributed across a network of computers, making it nearly impossible to alter or tamper with past records once they are verified and added.
Why is a Blockchain used for Crypto?
It provides a secure and transparent way to record transactions without a central authority like a bank. It allows for the creation of a digital currency that can be traded safely and is resistant to counterfeiting. The decentralized nature eliminates the need for intermediaries, which can lead to faster and cheaper transactions.