What is a “Cryptocurrency”?
Based on Wikipedia definition, a cryptocurrency (or crypto currency) is a medium of exchange using cryptography to secure the transactions and to control the creation of new units of them. Put another way, cryptocurrency is electricity converted into lines of code with monetary value. The main idea is that a cryptocurrency is a digital currency decentralized from any central bank of any country.
As we told before, unlike centralized banking, like the Federal Reserve System, where governments control the value of a currency like USD through the process of printing fiat money, government has no control over cryptocurrencies as they are fully decentralized. Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known.
The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.
The first cryptocurrency to be created was our favorite one here: The Bitcoin. Bitcoin was created in 2009 and uses SHA-256, which is a set of cryptographic hash functions designed by the U.S National Security Agency. Bitcoin is a cryptocurrency that is based on the proof-of-work system.
As of March 2015, hundreds of cryptocurrency specifications exist; most are similar to and derived from the first fully implemented decentralized cryptocurrency, bitcoin. Most cryptocurrencies are designed to decrease in production over time like Bitcoin, which creates a market cap on them. That’s different from fiat currencies where financial institutions can always create more, hence inflation. Bitcoin will never have more than 21 million coins in circulation.
While hundreds of different cryptocurrency specifications exist, most are derived from one of two protocols; Proof-of-work or Proof-of-stake. All cryptocurrencies are maintained by a community of cryptocurrency miners who are members of the general public that have set up their computers or ASIC machines to participate in the validation and processing of transactions timestamping and adding them to the ledger in accordance with a particular timestamping scheme.
The security of cryptocurrency ledgers is based on the assumption that the majority of miners are honestly trying to maintain the ledger, having financial incentive to do so. Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies are less susceptible to seizure by law enforcement.
Cryptocurrencies are also less susceptible to seizure by law enforcement or having transaction holds placed on them from acquirers such as Paypal. All cryptocurrencies are pseudo-anonymous, and some coins have added features to create true anonymity.
What is a Cryptocurrency Hash?
Cryptocurrency mining power is rated on a scale of hashes per seconds. A rig with a computing power of 1kH/s is mining at a rate of 1,000 hashes a second, 1MH/s is a million hashes per second and a GH/s is one billion hashes per second. Every time a miner successfully solves a block, a new hash is created. A hash algorithm turns this large amount of data into a fixed-length hash. Like a code if you know the algorithm you can solve a hash and get the original data out, but to the ordinary eye it’s just a bunch of numbers crammed together and remains practically impossible to get the original data out of.
Cryptocurrencies are digital currencies which are used primarily outside existing banking and governmental institutions, exchanged over the internet. While these alternative, decentralized modes of exchange are in the early stages of development, they have the unique potential to challenge existing systems of currency and payments.
What is BITCOIN?
BITCOIN is a revolutionary concept: digital currency of a new era, product of an open-source project created by Japanese geek Satoshi Nakamoto, called “Bitcoin: A Peer-to-Peer Electronic Cash System”.
Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy services, Cars or Trade Forex.
What you need to know about bitcoins.
For those that are wanting to claim Bitcoin, without initially spending any of their own funds up front to do, so it is also very possible to achieve. There are plenty of sites available that are called faucets just like this site, and in these faucets the end user can visit them daily to earn Bitcoins with.
Furthermore, just like our website here where you can earn free Bitcoins, there are also plenty of other online gaming portals that you can play games to earn Bitcoins with them too.
Bitcoin as a form of payment for products and services has seen growth, and merchants have an incentive to accept the digital currency because fees are lower than the 2-3% typically imposed by credit card processors. A Faucet gaves people free bitcoin. You can win bitcoin at a bitcoin faucet by solving things. To get free bitcoins or win free bitcoins you also can referrel with a multiplier of 0,2 to get free Satoshis for just placing a link.
When it comes to the currency term Bitcoin, for many people they at first might be overwhelmed with ways to get a hold of it. However, we hope our article has now cleared up some of the mystery you might have been experiencing about what you can do with it when you earn some Bitcoin.
Finally, we strongly encourage our readers to take hold of learning as much as they can about Bitcoin, and start on their own path to earning them.
Copyright © by Bearbitcoin, 2016