Happy day Read.cash Community, with this title I begin to comment on the world of cryptocurrencies, research that I have been doing for some time, I now want to share, perhaps many of you are more advanced than me, in fact I still feel many deficiencies due to how fast technology advances, trying to keep me up to date.
Now I am going to start with the basics of cryptocurrencies, in this first part we are going with Blockchain, since some time ago we have heard about Bitcoin, Ethereum, Bitcoin Cash and other cryptocurrencies, as we know they are digital currencies. We also know the fiat money that we have in each country, such as the Dollar, Euro, Peso, Bolivars, among others, this money is based on the faith or trust of the community, that is, it is not backed by precious metals, only a promise of payment by the issuing entity. With fiduciary money we need centralized entities such as banks to be able to carry out money transactions.
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Blockchain, started in 1991, was designed to authenticate digital documents so that they could not be modified after they were registered. In 2008 Satoshi Nakamoto used this technology to create the first cryptocurrency, Bitcoin.
Blockchain, contains very important information, each block of the chain contains mainly 3 elements:
The information, for example Bitcoin, would be the information on the transfer of money, we would see the issuer, receiver, time, date, amount, among others.
Hash, which is the identification number of the block, so it is unique and unrepeatable, every time a new block is created a new Hash is calculated.
Hash of the previous block, so each block is linked to the previous block and the successor block.
An important thing about the Blockchain is that it is unhackable or extremely difficult to do so, so the Hash that has unique information of the block, if the information of the block changes the Hash will also change, additionally this is constantly audited, if you try to change the information of a block, to be linked to the next, the information of the Hash would change creating an error, forming an invalid chain, as there was a connection with different information.
Each blockchain user has a copy of the database, all this makes that the certification and security of the data is given by the users themselves, which are millions of people.
Photo By: IT Renting
How can more and more users be kept on the Blockchain?
First: The same people who rely on this technology and maintain it.
Second: They have economic interests, being the miners responsible for creating new blocks.
To create new blocks you have to solve very complex mathematical problems, this is achieved with specialized hardware, the miners make this technology available, once the mathematical problem is solved the block is added. The other members of the network certify the veracity of the correct solution, so the miner who made the answer is given the cryptocurrency.
Uses of Blockchain
It serves to store any type of records, they can be banking, medical records, also in cryptocurrency transactions, it can be used for the election of a president, in contract signatures or in the creation of digitized works of art.
To exemplify this we could use our educational records, that is, all the information that rests in the records of the Ministry of Education. If I travel to another country to give a lecture, the only thing I would have to present would be my ID or passport, the people in charge would verify that all the information registered in real time in the Ministry of Education is correct to access the lecture.
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Friday, October 08, 2021
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Photo Portada by: https://www.eluniverso.com/noticias/2021/01/21/nota/9596452/blockchain-tecnologia-que-podria-implementarse-ecuador/
Thank you Frank for explaining all this in simple words. I have some years trying to get into the world of crypto. But I don't have any technical knowledge regarding the technologies of each project.