What is cryptocurrency?
Cryptocurrency is digital money that’s the based on blockchain technology. You probably heard about most popular cryptocurrency, Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
What is Blockchain?
Instead of giving you a definition, I will try to help you understand what problems Blockchain is solving.
Let’s say Eric is your best friend. He is travelling around the world and after a few days he is calling you:
“Hey man, I’m broke, could you lend me some money”
“Hey sure, I will send it right away”
Next you call your bank and ask them:
“Hi, could you please send 1000$ from my account to Eric?”
“Yes, of course”
Now in the bank they open your account ledger to see if You have enough funds to send 1000$ to Eric. Because You are rich, the bank makes an inscription in your account:
28.09.2019 10:00 You —–> Eric 1000$
You are calling Eric:“Hey man, money is sent, you can withdraw it from the bank”
Let’s see what actually happen here…
You and Eric trusted the bank to make a transfer between your accounts. Physically, the money didn’t travel, but the bank made a change in your accounts ledger. The only change was necessary but not you neither Eric could do that. That’s the problem of our system. We trust the bank as a meddler for doing things which demand mutual trust. To bring chaos, you just need to take down the middle man or burn the ledger account.
What will happen if the bank will write 1500$, instead of 1000$?
Can we create a system in which we can do transactions without the bank?
Can we create ledger between us instead of trusting the banks?
Yes. The answer is Blockchain.
Blockchain is a method which allows you to register transactions between users without a third party,
Blockchain is ledger where informations are save.