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Blockchain, Cryptocurrency, Bitcoin - What are they?

 Anyone following technological trends has probably heard of these words. Even regular people might have come across these terms when the value of Bitcoin reached 5 digits(in USD) in late 2017. But even after 3 years of that incident, these words are just fancy jargon(s) comprehended by nerds. Regular people know these words but don't fully understand them. Since this blog is dedicated to computers and gaming, I feel like I should address them because Crypto-miners are directly affecting GPU prices and availability to this day. The motto of this blog was to simplify tech for general mass, so here's my attempt at simplifying cryptocurrency.


What is Blockchain?

I'm starting with blockchain technology first because without it, cryptocurrencies like Bitcoin wouldn't exist(in fact, blockchain was originally invented to create the Bitcoin). 

A Blockchain is a decentralized ledger for all transactions across a peer-to-peer network. 

So what does the above sentence mean? It means that the blockchain is a growing chain(list) of encrypted blocks(records). Each block contains a cryptographic hash of previous block along-with a timestamp and transaction data. This allows the participants to confirm the transactions without needing a central clearing party like a banking system. 

This structure of blockchain makes it immune to hackers as there is no single point of failure and it opens up a lot of potential applications for blockchain.


What is cryptocurrency?

Now that you have some basic understanding of blockchain technology, you can grasp the concept of cryptocurrency. As explained earlier, blockchain was invented to make Bitcoin possible. Bitcoin is the most popular cryptocurrency out there.

Cryptocurrencies can be spent and received by anyone, anywhere, and at any time without the need for a bank or a government. This is what makes them so revolutionary.

That statement above summarises Cryptocurrencies. Other than the fact that Cryptocurrencies are decentralised and are global digital currency, they serve the same purpose as fiat currencies(dollars, pounds, euros, INR, etc). Another difference to keep in mind is that fiat currencies are practically unlimited, ie can be produced as required. But cryptocurrencies have a limit, therefore they're affected by supply and demand(reason why Bitcoin is valuable right now, it is more scarce than Gold). 


What is Bitcoin?

Bitcoin is a digitally encrypted currency running on blockchain- an immutable, distributed transaction database.

It is the first cryptocurrency whose success paved the way for all other cryptocurrencies exist today. Bitcoin was first real implementation of blockchain technology. Nobody knows who is the actual inventor of Bitcoin. You will find the documentation that Bitcoin was invented in 2008 by Satoshi Nakamoto, but no one knows whether it is name of a person or a group. One thing we know for sure that Bitcoins are not infinite, supply is limited to a fixed number of 21,000,000 bitcoins.

Bitcoin's journey to become most dominating cryptocurrency wasn't without criticism and backlashes. At the beginning it was associated with illegal activities in Dark Net, so people were reluctant to getting Bitcoin(even I declined an offer to buy 4 Bitcoins for ₹1500, I regret that decision today). Also the 'mining' of Bitcoin requires a specialist PC that needs to be running 24x7. Miners realised that running the algorithm on a multi-GPU system increases the profit significantly. So miners started buying all the decent GPUs available on market. 


I know that this post is not an 'in-depth' introduction to blockchain and cryptocurrency, but I hope it was informative enough for you have a basic understanding. 

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