We all have heard about Bitcoin or cryptocurrency. Bitcoin gained popularity in 2018 when bitcoin raised 1000$ to 20,000$ in a year and dropped again to 4,000$. In 2021 again bitcoin reached its top of 69,000$ and again it gets drop to 20,000$. That’s why we started researching the future of cryptocurrency, we keep seeing claims that it’s not going to be long before we see real-life applications of this technology. We think “It is just a matter of time until cryptocurrencies—whose application is almost limitless and may require greater attention—find their footing.”
Understanding CRYPTOCURRENCY
In the summer of 2009, a person using the alias Satoshi Nakamoto published a white paper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (hereafter bitcoin). Bitcoin is an open-source peer-to-peer version of electronic cash that allows users to make direct payments with each other without any middlemen. By hashing transactions into a continuous chain of hash-based proof-of-work, the network timestamps transactions, creating a record that cannot be modified without repeating the proof-of-work. Bitcoin is the first blockchain technology, a distributed ledger of transactions that can be cryptographically secured and decentralized. Blockchain technology is used for CRYPTOCURRENCY transactions and has many other applications in areas such as supply chain management, identity management, and cybersecurity.
The blockchain is a public ledger that records transactions chronologically. The blockchain database is continually growing as each node (computer) on the network adds to it with new blocks of data. Each block contains a cryptographic hash of the previous block and other information such as timestamp, transaction data, and transaction fees. Blockchain technology makes it possible to create cryptocurrencies other than bitcoin. Ethereum is a cryptocurrency that uses smart contracts and supports decentralized applications. It was created in 2013 by Vitalik Buterin, who then worked on Ethereum along with Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. Gavin Wood left the Ethereum project in 2015 to develop his projects, like Kyber Network.
The difference between bitcoin and Ethereum is Smart Contracts. Smart contracts are self-executing programs that run on top of the blockchain network and are fully autonomous: they can be programmed to execute whenever certain conditions are met (such as when money is transferred from one address to another).
In 2014, Ethereum was introduced with its blockchain. These blockchains are similar to Bitcoin in that they have a public ledger of transactions, but they differ in that they don’t require proof of work to verify transactions (which lowers the barrier to entry). It has gained popularity because of its ability to interact with multiple blockchains.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. It uses a decentralized Virtual Machine to execute scripts on the blockchain. These can be anything from simple programmable money to more complicated trusted financial applications like voting systems and supply chain management platforms.
Meanwhile, CRYPTOCURRENCY have diversified as Initial Coin Offerings (ICOs) allow startups to raise funds by selling tokens that are stored on their blockchains. In an ICO, a company sells investment tokens in exchange for cryptocurrencies such as bitcoin or Ethereum. The proceeds from the sale can then be used by the project team to develop the product or service they are creating.
ICOs were first introduced in 2013 when programmer Vitalik Buterin created Ethereum and released its white paper—an outline describing how it would work and what problems it intended to solve. Since then, hundreds of projects have launched their digital currencies through this method of fundraising; some have been successful while others failed spectacularly Cryptocurrencies have the potential to impact global finance and society in more ways than one. They are a new form of currency that is not controlled by any central bank, yet they provide an alternative to traditional financial institutions. Cryptocurrencies are digital, decentralized, and anonymous.
Bitcoin and other cryptocurrencies are also known as “cryptocurrencies” because they use cryptography to secure transactions and validate blocks on the blockchain network—a distributed database recording all transactions made between two parties without needing third-party oversight or verification.
The blockchain ledger system makes cryptocurrency transactions transparently visible for anyone who wants access; however, this does not mean that everyone can see what’s happening within their accounts since there is no way for them (or anyone) outside of those involved in these transactions even know which ones they were involved with.
The rise of CRYPTOCURRENCY has brought new opportunities for businesses and individuals alike to take advantage of decentralized blockchain technology. However, it also poses a threat to traditional financial institutions. We believe this technology will continue to evolve into new industries and applications as it becomes more accessible and accepted by society.
