What is cryptocurrency? How does cryptocurrency work? Elon Musk responsible for cryptocrash?

In today’s Video we are going to understand
cryptocurrency in details Welcome back to thought ctrl
A cryptocurrency, simply is a decentralized form of digital currency secured by encryptions
and algorithms at both ends.What we mean by decentralized is that there is no central
authority like banks or the government to regulate this type of currency. This decentralization and the method of encrypting
transactions makes it nearly impossible to counterfeit or manipulate cryptocurrencies. As we know, Many companies issue their own
currencies, which can then be used to trade specifically the goods and services that the
company provides. For example ola money, zomato wallet, or even
casino chips. The difference between these token currencies
and cryptocurrencies is precisely what we talked about earlier, decentralization and
secure transactions. Infact the 'crypto' in cryptocurrency refers
to thecryptographic techniques and encryption algorithms that it uses. Along with that, to manage and record transactions
, most cryptocurrencies use a technology called blockchain —which keeps an online ledger
of all the transactions that have ever been conducted, and spreads them out across various
computers . Bitcoin was the first blockchain based cryptocurrency
, and still remains the most valuable and popular. Let's look at this record keeping technology
behind bitcoin-   Blockchain is basically a specific type of
database.

Random Guy- What is a database ?
It's a collection of information, stored electronically on a computer system. Typically, information or databases are structured
in a table format, to allow easier search and filter options. Kind of like a spreadsheet, but bigger , faster
and accessible by any no. Of users at once. Random guy 2: So how does a blockchain differ
from a database? Anchor-
Well all blockchains are databases , but not all databases are blockchains.

The key difference lies in the way the data
is structured. A blockchain collects information together
in groups, that are known as blocks. These Blocks have a certain storage capacity
and, when full, are chained onto the previously filled block, forming a chain of blocks containing
data . Hence the name, blockchain. Any new information is now added to a fresh
block which will again be added to the chain once filled. Each block is given an exact timestamp as
to when it is added to the chain. This system results in an irreversible timeline
of data, if implemented in a decentralized way. And In bitcoin's case, as we know, blockchain
ledgers are spread across various computers , so no single person or group has control,
instead all users store data collectively. So each computer or group of computers is
operated by separate individuals or groups in a different geographical location. These computers that makeup Bitcoin’s network
are called nodes. And in blockchains, each node has a full record
of the data stored on the blockchains since its inception. In the case of bitcoin, the entire history
of bitcoin transactions.

So if one node has an error in its data, it
can use the thousands of other nodes as a reference point to correct itself. This way, no one node within the network can
alter data. Again, making the history of transactions
in each blockchain, irreversible. it makes the system transparent. Lets say , you want to hack and alter the
blockchain, to steal bitcoins. If you just change your copy, it would just
be rejected by the other nodes as illegitimate. To actually pull off a feat like that you
will have to control and change at least 51 percent of all the nodes at the same time. An attack so huge, will cost more than it
can steal, making it practically fruitless. This technology that makes it impossible to
forge transactions , is central to the appeal of bitcoin or other cryptocurrencies. The key thing to understand here is that Bitcoin
merely uses blockchain as a means to transparently and securely record payments, but blockchain
can be used to record any kind of data points.

The only goal of blockchain is to allow digital
information to be recorded and distributed, but not edited. And it does not always need to be decentralized. Private or centralized blockchains can certainly
exist. Many experts see blockchain technology as
having serious potential for uses like crowdfunding, Infact, A vast no. Blockchain projects are underway currently. For example using the blockchain technology
to count votes in a democratic election, which can result in a drastic decrease in fraudulent
votings. (Donald trump in video)
Even information like legal contracts, state identifications, a company’s product inventory
, and much more can benefit from the use of blockchain.

But the semi-anonymous nature of cryptocurrency
transactions also make them well-suited for a host of illegal activities. And of course some cryptocurrencies are more
private than others. Bitcoin, for instance, is a relatively poor
choice for conducting illegal business online, since the forensic analysis of the Bitcoin
blockchain has helped authorities to arrest and prosecute criminals in the past. coins like Dash, Monero, or ZCash, are far
more difficult to track.(wink wink) A week into the year 2021, the market value
of all the world's cryptocurrencies surpassed 1 trillion dollars. Currently , there are more than 6700 cryptocurrencies
being traded publicly. The appeal of Cryptocurrencies in the market
is for a variety of reasons. Many see them as the currency of the future,
so are racing to buy them before they become more valuable. Some like the fact that they remove the central
banks out of the picture. As we discussed, many supporters like the
technology behind them. But most people just like them because they
are currently going up in value.

Cryptocurrencies may go up in value, but most
serious investors still see them as mere speculations, not real investments. But Why? Well because, Just like real currencies, cryptocurrencies
generate no cash flow, so for you to profit, someone has to pay more than you did, for
the same amount of currency. the legendary investor Warren buffet compared
bitcoin to paper checks: “It's a very effective way of transmitting money and you can do it
anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?" And for the people who see cryptocurrencies
as the currency of the future, they should note that a currency needs much higher stability
than what the current cryptocurrencies have shown. For example, Bitcoin traded at close to $20,000
in December 2017, its value then dropped to as low as about $3,200 a year later.

By December 2020, it was trading at record
levels again. This price instability creates a negative
cash flow economy , If bitcoins might be worth more in the future, why circulate them now
? And anyway, which govt or central bank is
going to give up its authority on regulating national currencies??.

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