AN INTRODUCTION TO CRYPTO-CURRENCY FOR BEGIGNERS PART 1

AN INTRODUCTION TO CRYPTO-CURRENCY FOR BEGIGNERS PART 1

A currency is a medium used for exchange during buying and selling, before the invention of currencies, we had a trade by barter system, where you had to locate people with similar interest to exchange for goods and services.
Currencies comes with a legal tender that certifies its worth and value in the market, meaning that a currency can gain value and loose value too. It all boils down to the activities in the market and the economics of trade.

So what is crypto-currency?

A crypto-currency is a digital asset, which have monetary worth, its digital, so you can’t touch it. It’s designed to be used as a medium of exchange just like physical money. What makes it very unique is that it uses strong cryptography to secure financial transactions. Crypto-currencies are alternative moneys that can use on the net for financial transactions. Bitcoin was the first crypto-currency that was launched as open source software in 2009,
The idea of crypto-currency was to revolutionalize the banking sector. Financial institutions like banks place so many charges and fees on transactions. Banks operates on a centralized information system, meaning you can’t see how your money is processed or how it’s been manipulated.
So basically you give out your money to an institution and you’re stripped off complete access to your funds. Bitcoin offers a decentralized information system, meaning you have access to your money, and only you can manipulate your data and information, these information are open to anyone to view, but they can’t edit it, unless you become careless and give away your security details.

According to Jan Lansky, a crypto-currency system must satisfy six conditions which are:Source

• Decentralized system
• The system keeps an overview of crypto-currency units and their ownership
• The system defines whether new crypto-currency units can be created.
• Ownership of crypto-currency units can be proved exclusively cryptographically
• The system allows transaction to be performed in which ownership of the cryptographic units changed
• If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.Source

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