Web3.0 Applications - Intro to Cryptocurrencies Pt 1
The Rise of the Cryptos
Hello. I hope the past week has been an eventful one for you, full of useful experiences.
From this week, I intend to dive in more into the many applications of Web3.0 starting with Cryptocurrencies, one of the bedrocks of the decentralized web.
So what exactly is a Cryptocurrency? A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It is a decentralized system for verifying that the parties to a transaction have the money they claim to have, eliminating the need for traditional intermediaries, such as banks, when funds are being transferred between two entities.[Wikipedia]
Also, Cryptocurrency is a sub-type of digital currency and a digital asset that relies on cryptography to chain together digital signatures of asset transfers, peer-to-peer networking and decentralization.
Before we continue down the rabbit hole, first let's understand the basics of this technology; Cryptography, Peer-to-peer networking and Decentralization. Why is this so? Earlier in this series, we already established what the latter meant in the whole Web3.0 ecosystem. It is because traditional intermediaries like the banks are cut off from the transaction pipeline, this is why decentralization is celebrated. For the cryptography bit; it is important that a high level of digital security is ensured in the system due to the openness and transparency contained therein. Cryptography is derived from two words; "secret" and "writing" and is as old as Ancient Greece. Modern Cryptography is a fuse of mathematics, computer science, information security, electrical engineering, digital signal processing, physics, and others[Wikipedia] and its applications transcends Digital currencies into electronic commerce, military communications, chip-based payment cards(Visa, Mastercard etc) etc. So in effect, the strongest form of digital security in form of cryptography is implemented in cryptocurrency transactions. We will learn more about this in later articles.
For peer-to-peer networking, this underscores the point of decentralization as any two parties(call them Bob and Alice) can easily and comfortably carry out seamless transactions without needing an intermediary.
So what is a cryptocurrency? How many do we have existing out there? The first cryptocurrency I know is Bitcoin. It is also the most popular and valuable(once traded as high as $64,000). It is primarily used as a means of payment.
Today, many more cryptocurrencies have arisen. These others are known as Altcoins and there are thousands of them today(over 20,000) each representing a different and special concept.
The world of Cryptocurrencies is a very exciting one and we can only go through it with a fine comb. In the next article, I will bring to you some of the cryptocurrencies that are quite popular and useful out there. Subsequently we will look at how cryptocurrencies can be managed through the use of exchanges. We will also look at how crypto coins are mined and what an ICO is plus much more.
So we see next week. Be Good.