Explaining Core Cryptocurrency Concepts

What is Cryptocurrency?Cryptocurrency is a kind of digital currency, virtual currency or alternative currency. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems.

What is Blockchain?A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Blockchains which are readable by the public are widely used by cryptocurrencies. Cryptocurrencies are only a single application of the blockchain technology.

What is Mining?Only miners can confirm transactions. This is their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.

What is Timestamping?Cryptocurrencies use various timestamping schemes to avoid the need for a trusted third party to timestamp transactions added to the blockchain ledger.The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256 and scrypt.[24] The latter now dominates over the world of cryptocurrencies, with at least 480 confirmed implementations.[25]Some other hashing algorithms that are used for proof-of-work include CryptoNight, Blake, SHA-3, and X11.

What is an Initial Coin Offering(ICO)?An initial coin offering (ICO) or initial currency offering, a type of crowdfunding using cryptocurrencies, is a means of raising capital that has been prone to scams and securities law violations. Fewer than half of all ICOs survive four months after the offering.

What is a Cryptocurrency Exchange?Cryptocurrency exchange is a businesses that allow customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money, or different digital currencies.

What are some security issues regarding cryptocurrencies?There are some security concerns when dealing with cryptocurrencies and mining. Some of these are; losing private keys, getting them stolen by malwares, ransomware, unauthorized mining. There have been exchanges that got hacked and lost tens of millions of dollars worth of cryptocurrencies.

What are Smart Contracts?Distributed ledgers enable the coding of simple contracts that will execute when specified conditions are met. Ethereum is an open source blockchain project that was built specifically to realize this possibility.

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