What exactly is Cryptocurrency ?

A cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange.

Some other features of cryptocurrency:

• There's a limit to how many units can exist
• Easily verify the transfer of funds
• Operating independent of a bank
• Allows new units to be added only after certain conditions are met

What makes Cryptocurrencies special ?

• Little to no transaction costs
• 24/7 access to money
• No limits on purchase and withdrawals
• Freedom for anyone to use
• International transactions are faster

What's the Cryptography ?

Cryptography is a method of using encryption and decryption to secure communication in the presence of third parties with ill intent

Cryptography usually requires a computational algorithm (like SHA256), a public key (that the users shares with everyone) and a private key (which acts like a digital signature of the user)

A normal bitcoin transaction:

Transaction details ➡ SHA256 ➡ Passed through a signature algorithm with the user's private key ➡ Digitally signed output ➡ Distributing the output across the network with sender's public key ➡ verification and being added to block

A normal Bitcoin transaction first you have the transaction details, now this details who you want to send it to and how much bitcoins you want to send then it's passed through a hashing algorithm for Bitcoin we use SHA256 algorithm the output that you obtain is passed through a signature algorithm with the users private key, now this is used to uniquely identify the user this output is then distributed across the network for people to verify this is done by using the sender's public key the people who verify the transaction to check whether it's valid or not unknown as minus, now after this is done the transaction and several others are added to the blockchain where it cannot be changed again.

There are two major cryptocurrencies (among the many) in the market: Bitcoin and Ether

Bitcoin is a form of digital currency and is decentralized without a central bank. It uses blockchain to perform transactions on a peer-to-peer network.

Ether is a currency that's accepted in the Ethereum network. Ethereum works on blockchain technology to create an open source platform to build and deploy decentralized applications.

Cryptocurrency: Bitcoin and Ether

The similarities between Bitcoin and Ether (unit of currency powered by Ethereum) are:

They're the biggest and most valuable cryptocurrencies

Both of them use blockchain and mine currency using proof of work

Widely used across the world