What is Cryptocurrency: Everything You Need To Know [Ultimate Guide]

[ameerrosic]

What is cryptocurrency? 21st-century unicorn – or the money of the future?

This introduction explains the most important thing about cryptocurrencies. After you‘ve read it, you‘ll know more about it than most other humans.

Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.

In 2016, you‘ll have a hard time finding a major bank, a big accounting firm, a prominent software company or a government that did not research cryptocurrencies, publish a paper about it or start a so-called blockchain-project.

 
http://blockgeeks.com/guides/what-is-cryptocurrency-everything-you-need-to-know-ultimate-guide/

[franky1]

nope the article has not got it quite correct

imagine
digital currency in laymans
a single entry

Code:

ABCDE has $1

simple clear but stored on a computer instead of paper so its "digital"

obviously the other 2 terms im about to explain 'cryptocurrency' and 'blockchain' are obviously using computers so they too are digital by default

cryptocurrency in laymans
a single secured entry

Code:

message:"ABCDE has $1" signature:"G0bl3D1g00p l00k1ng B45ed 0n s1gn3ed m3554g3 wh3r3 ABCDE is the publ1c k3y 0f 4 crypt0gr4ph1c k3yp41r"

where the data/entry is validated using cryptographic keypairs making a signature of the message to validate the public key is valid to the message

blocks in laymens
a cluster of entries - hint: yea you may spot another word for a cluster of data packaged up being refered to as a block of data.

Code:

block 0:"
ABCDE has $1
DEFGH has $2
"
hash:6b74e0c07d0d81191564fc3c82b95933

or

Code:

block ABCDE:"
ABCDE has $1
DEFGH has $2
"
signature:"G0bl3D1g00p B45ed 0n crypt0gr4ph1c k3yp41r wh3r3 ABCDE is the publ1c k3y"

its important to note a block does not need to include cryptocurrency entries. the clustered data can be anything.
its important to note a block does not need to use hashes to package the cluster of entries into a block. it can use cryptographic keypairs.
if using hashes, it does not need to be a single hash, it can be a combination. also it doesnt need to be any specific type of hashing algo.
i used MD5 as an example hash in previous and next examples. which doesnt matter

blockchains in laymens
a cluster of entries, packaged together as a block, but also including the hash of the previous block to link the previous block to current block

Code:

block 0:"
ABCDE has $1
DEFGH has $2
"
hash:6b74e0c07d0d81191564fc3c82b95933

Code:

block 1:"
ABCDE has $2
DEFGH has $3
6b74e0c07d0d81191564fc3c82b95933
"
hash:90e6edf62aa0c664516cdde9b7f9f144

Code:

block 2:"
ABCDE has $3
DEFGH has $4
90e6edf62aa0c664516cdde9b7f9f144
"
hash:fda9666b2c4ab12c7b11953875a5fefe

some systems can be a blockchain but without the cryptocurrency element.
some systems can be a blockchain but without the hash element and instead have something else in each cluster that links to the previous such as a cryptographic keypair signature.
some systems can be a cryptocurrency but without the blockchain element.

all together there are atleast 10 main elements that bitcoin uses. together.
where as some idea's of cryptocurrency /blockchains may only use one or two (as shown above)
bitcoin instance uses atleast 10, some are
1) cryptocurrency entries
2) blocks
3) sha256 hashed blocks
4) blockchains hashed together
5) proof of work blockchains

and other things on top. and yes 3-4-5 are three separate security measures that different systems networks can include not include or choose differently. blockchains can still be blockchains even without POW or sha based hashing
but by not using the same amount of measures or the strongest form of each measure will make it less secure then bitcoins security level.

other elements include
6)rule checking
7)distrubuted rule checking
8)distributd storage

and so on