How Cryptocurrency works. Explained P2

Blockchain is just a secure type of

Ledger so you know that big spreadsheet That everyone has that’s recording Transactions. Blockchain is just a way of organizing. It funnily enough Into blocks so every time I pay for Something with bitcoin.

That transaction is recorded as a block. Each block contains transaction data Like who was paid and how much a hash. Which is a unique identifier? And the hash of the previous block in The sequence or the last transaction. That was recorded And the pivot on which this system rests. Is that if something in a block is changed. Then that block’s hash will change you Might be starting to see where this is Going because each block. Also contains the data of the previous. Block if the hash of the block here Changes.

Then the next block will no longer have A matching hash with it and so every Subsequent block after that one Becomes invalid, so if you combine this With what we talked about earlier This whole idea of a million different Users all having their own copy of the Blockchain ledger.

Then, if I wanted to fraudulently create A transaction that says paid me money I’d have to not just tamper with a block. And every single block after it But I’d also have to do this on at least.

Half a million computers around the World . So that the majority of computers in the The system is also consistent with the one I’ve tampered with. Probably not gonna happen, whereas just Hacking into someone’s dollar account And sending myself money that does happen and it’s sometimes as simple as just literally guessing someone’s six-digit pin but there’s a massive jump between that and trying to hack into 500000 uncorrelated computers at once.

Okay So Cryptocurrencies have their issues I’m Literally going to get to them in a Minute

But hopefully you can see why some People are excited about them And that brings me on to investments. You’ve probably heard of people Putting money into cryptocurrencies and All that means is that they’re Exchanging normal currencies like Dollars.

For cryptos like bitcoin they’re hoping That those cryptocurrencies become the Next big thing. And therefore suddenly shoot up in value. At which point they can then Either spend them or just exchange them. Back for more dollars than they bought Them for There’s actually a term for Cryptocurrencies that skyrocket like This Going to the moon or mooning.

But that can mean something very Different depending on who you talk to. But the one decision that someone would Have to make at this point is Which cryptocurrency because we’ve Talked about bitcoin but bitcoin is just One of over 4 000 different cryptos.

Already and each of them have different Properties. For example, theorem which is the second Most invested in. Can process transactions even faster. Than bitcoin there’s one called Cardano. Which is considered to be? Technologically superior There’s one called Lidocaine which has a Newer algorithm and if you are enjoying. This post then a sub to the site.

And disclaimer this is not in any way at All. Financial advice, I not recommending . This I’ve literally only put in a small The amount of money that I am comfortable. Losing And to be honest the way I’m seeing it Is more as an optimistic gamble. As opposed to a strategic investment the The only thing that you absolutely should Buy is One of these hats best purchase I’ve Ever made.

That is financial advice so I’ve put 40 In interim 20 To polygon 20 in Cardano 10 in cartesi And 10 in litecoin and this portfolio. Has basically gone up and then down and Then up and then down and then

Honestly, you probably get more Consistency from so Crypto is in a pretty weird place right. Now and this brings me onto its problems The dark side one of the main ones is Exactly this The reason I think a lot of people don’t Take crypto seriously. Is its volatility because these?

Currencies are so new And they’re completely digital unlike. Say the market for gold No one really knows what they should be Worth and so you find that crypto prices Are quite heavily speculative They’re tied to the news cycle like when. A glowing article comes out about them prices spiral upwards but then when elon musk posts a tweet that puts them down. They go way down two is the fact that they’re not really accepted as a form of payment in well most places like yes i can now book holidays with crypto. I can donate to Wikipedia with crypto. But there’s been a lot of companies who Are pretty back and forth with it. Microsoft tesla even burger king are Examples of companies who said they were Going to accept bitcoin. And then they said they weren’t going to accept bitcoin three. There can be an environmental concern. See the whole reason why a lot of these. Cryptos are so secure Is because of this concept of The transactions. Being verified many, many Times With many, many computers so I think it’s a Fair criticism that that in itself Creates a fundamental inefficiency That much computing power requires a lot Of electricity

But at the same time you could counter. This by saying that traditional banking Uses more electricity that there are Newer coins with better technology. That is more efficient and that one day . We’ll be able to get that electricity . From renewable sources Depends who you ask and four there’s

Also a pretty strong sentiment that Because there’s no real policing or Regulation on crypto right now It’s like the perfect currency for Criminals but to be honest, I think the The data speaks for itself on that one

According to chain analysis 0.34 percent Of crypto transactions are criminal Up to 5 of normal cash transactions are Criminal and I think that’s because it’s a bit of a The misconception that currencies like Bitcoin. Are anonymous they’re actually Pseudonymous which means that even Though your actual details aren’t Visible to everyone.

Your public key, your unique identifier Will be Permanently baked into the block chain. Upon making transactions with it. So cash is just a better currency for Most types of criminal activity Because by its very nature it’s Untraceable. Don’t ask me how I know that but as well As the negatives there are also just some straight up odd things that have come about because of crypto for example you might have heard of an nft. A non-fungible token, if you haven’t . You might want to take a seat for this One. I don’t want to call it stupid, but uh This one’s a head scratcher So you know how now you can go into an Art galleries and you can pay to own a Painting.

Well now, thanks to the block chain you Can pay Just to have digital ownership over. Something so it doesn’t stop anyone from Using or sharing that thing. But all it means is that you’d Effectively be the owner of the original And they’d all be sharing copies of it Even if for most intents and purposes They look and behave identically. Like a lot of these nights are literally Just JPEG images

I think the reason some people find this Stupid and kind of funny. Is that there’s a distinct difference Between buying a nifty and buying the Rights over something. So if you buy the right service Something that’s a very legitimate. Purchase because you can create merch or Sell licenses. With a night you can’t the original owner.

Still has All the reproduction rights over that Piece all it is Is that you’re using the block chain too? Prove that you have some Ownership over that asset, but clearly Just being able to say that has some Value because A night of this Gucci ghost sold for 3600.

The CEO of twitter jack Dorsey he sold The first tweet he ever made As a night for 2.9 million dollars Five words I could do that any takers And this one just blows my mind this. A photo which is basically an overview of One guy’s pieces of art Sold for 69 million dollars.

Very Nice to clarify this literally just Gives the buyer some Digital ownership over a JPEG image And finally you might have heard of Deducing dirt coin is based on the same Tech as Lidocaine. But it was created as a joke people. Started sharing it and putting a bit of Money into it because they thought it Was funny But that propelled its value to the The point where now we have people who have Actually become millionaires. Just because they bought dogecoin when It was cheap, it’s an interesting world Out there

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