If you want to know what is cryptocurrency and we will talk about Satoshi Nakamoto’s obvious role in BitCoin.
You are on the right page!
This article will help you to understand what is cryptocurrency and the world’s most expensive Pizza transaction.
Hello, friends welcome to another fresh article of “Multibaggercalls.com”, Here in this article we will understand what is cryptocurrency and most importantly about whether you can mine or not.
We also discuss in detail Elon Musk’s indirect role in cryptocurrency.
If we talk about the history of currencies, they have been changing constantly for a long time now.
The Barter System was used years ago. Later, Barely was as currency in a lot of places.
Then came Gold and Silver coins. Copper coins were used as well.
Later emerged different currencies for different Kingdoms. Then came Digital Currency. Now, we have Cryptocurrency.
Do you know why On 22nd May, we celebrate Bitcoin Pizza day?
The story behind it is very interesting.
On 22nd May 2010, a Software Developer named Laszlo Hanyecz bought two Pizzas with 10,000 BitCoins.
At the time, BitCoin’s value was only $41. And today, the value of 10,000 BitCoins is ₹2,800 crores.
Laszlo Hanyecz had 1 Lakh BitCoins. If he held them today their value would be ₹28,000 crores.
In memory of this infamous incident, 22nd May is celebrated as Bitcoin Pizza Day.
Recently, BitCoin has been trending around the world. Now everybody is talking about BitCoin and Cryptocurrency.
At the beginning of cryptocurrency, nobody is well known about cryptocurrency but now everybody what to buy and invest in Cryptocurrency.
What Is Cryptocurrency?
A cryptocurrency is a digital representation of something valuable, such as money, that only exists online.
In 1983, Cryptographer, David Chaum, Built the world’s first Digital Currency Transaction System.
He named it “E-Cash.”
Many platforms were made after this, such as Digi Cash. Many different companies were built on its basis.
One of them was Elon Musk’s X.com
Later, PayPal acquired X.com and Elon Musk became a part of the PayPal team.
Then in October 2002, eBay bought PayPal. At the time, Elon Musk had an 11.7% stake in PayPal.
Based on this, he got $100 million for that transaction. With the help of this money, he started many of his companies.
Let’s come back to our main topic.
Cryptocurrencies were made to work on two main problems.
- Eliminate Mediator.
- Reduce Transaction Cost.
Whenever we make a transaction the bank acts as a middleman.
With help of Cryptocurrency, you can eliminate the middleman, In cryptocurrency, the transaction takes place between the sender and recipient.
There is no middleman involved in cryptocurrency transitions.
The second main reason is to reduce transaction costs.
When we send money to a foreign country banks charge high transaction fees.
Transactions can also be extremely slow, it can sometimes take days for a bank to guarantee that a payment has been received.
But cryptocurrency transactions take less time than back transactions time and the transaction cost is very low than banks.
Another issue is that these banks and companies need to store endless amounts of personal data about their customers to work out who is trustworthy.
But they can’t always be trusted to keep that information safe. If we don’t use a centralized source of information.
To Solve these issues the first cryptocurrency ever created was Bitcoin.
Now let’s take look at what is Bitcoin and how you can buy bitcoin and other cryptocurrencies.
What Is Bitcoin?
Bitcoin is the first cryptocurrency introduced by Mr.Satoshi Nakamoto. it is the first Cryptocurrency based on Blockchain technology.
Bitcoin uses a peer-to-peer payment network, where the responsibility to maintain a trusted ledger of transactions is shared between everyone, rather than one central body.
And, as there is no central authority needed, there are no disproportionate fees or personal data at risk of being compromised.
So, Bitcoin is a cryptocurrency that solves the issue of payment, but what else can cryptocurrencies do?
Since 2008 countless cryptocurrencies have been created, many of them carrying out different functions
in different blockchain ecosystems.
Investors buy into them because they believe in the product that the currency underpins.
Many people see cryptocurrencies as tools that can help developing countries by reducing fees, offer greater access to banking, help combat inflation and fight corruption.
Only time will tell if they change the world so drastically but one thing is for certain, the blockchain technology that they are built on is here to stay…
What Is The Return Rate Of Cryptocurrency?
The returns Cryptocurrency has given, it’s a topic of interest. From the start i.e, 2010-11 till today BitCoin’s price has increased a lot.
But if we talk about the last few years, The returns are quite shocking.
If you bought a BitCoin in 2016 at the price of ₹39,000, Its value in August 2021 would be ₹30 Lakhs.
Similarly, if you bought one Ethereum in 2016 for ₹700, That single Ethereum is worth ₹1.7 Lakhs today.
In the last 5 years, BitCoin has given A compounded return of 137% every year.
Ethereum has given a compounded return of 182% and Lite Coin has given a return of 108%.
Because of this return rate more investors are attracted to invest in cryptocurrency.
According to my opinion, you also have to invest in cryptocurrency, Once Mr.Elon Musk also says cryptocurrency is the future.
Now let’s understand how you can buy-sell or send-receive cryptocurrency.
How To Buy Sell or Send Cryptocurrency?
When you open a cryptocurrency wallet, you get an address with it.
How banks have unique account numbers, Similarly, wallets have a unique address.
Let’s assume you have to transfer some cryptocurrency to your friend.
Your friend will have to give you his BitCoin wallet address. Using the wallet address, you can easily transfer the cryptocurrency to him.
It means you must have a Cryptocurrency wallet to buy sell or send receive cryptocurrencies.
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So, why are you waiting for it opens an account with WazirX and starts investing in cryptocurrencies?
Who Will Verify Cryptocurrency Transaction?
So the question is if there is no mediator or bank here, Then who will verify the transactions?
For example, your friend is sending you 0.1 BitCoin.
The first step is to check whether your friend Has 0.1 BitCoin in his account or not and also check if the address they entered is correct or not.
This work of verifying all this is done by Miners.
All of these work based on BlockChain technology. So every transaction that happens is saved in a block.
How banks save transactions on files, Here the transaction is saved on a block.
When a lot of transactions are saved in one block, it fills up.
Then, another block is created and all other transactions need to be filled there.
Then a third block is created and the blockchain goes on. This is what we call BlockChain.
As soon as a block fills up, the miners receive a puzzle. Whoever miners solve the puzzle first, gets a reward.
That reward is in the form of a BitCoin.
This is a puzzle because as soon as the block fills up, This puzzle is used to seal that block, So nobody can manipulate the block later.
A lot of miners try to solve the puzzle in groups So they get good rewards.
In 2009, solving the puzzle would give you 50 Bitcoin. In 2012, it became 25 Bitcoin. And in 2016, it became 12.5 Bitcoin.
They say every 4 years, the reward reduces by half. Some miners try to solve the puzzles alone, some in groups.
So this is how the miners maintain the entire system and in turn, they get a reward.
Why Bitcoin And Other Cryptocurrencies Criticized?
Bitcoin and other cryptocurrencies are criticized because They require a lot of power consumption.
Every year Bitcoin uses 113 TWh in power consumption.
How much do you think is the Yearly power consumption in the banking system?
How much is it in Gold mining?
So it’s necessary to use renewable energy for mining as mining requires a lot of power.
So the question is whether you can mine or not? Yes, you can mine as well.
As far as the banking system is concerned, It consumes 263TWh of power every year.
The mining system consumes 240TWh of power every year.
So it’s using more power than cryptocurrency. But the way cryptocurrencies power consumption is increasing
It is necessary to mine based on Renewable Energy.
What do you think is the future of bitcoin and other cryptocurrencies is bright? please comment your opinion in the comment box and also share this article with your friends to understand everything about cryptocurrency.
I hope now you understand what is cryptocurrency and how its work. If anyone has any queries or suggestions please ask in the comment box.Gashik