Understanding Cryptocurrency part 1 | Tay Wilkins | Skillshare

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Understanding Cryptocurrency part 1

teacher avatar Tay Wilkins

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Taught by industry leaders & working professionals
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Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

2 Lessons (10m)
    • 1. Introduction

      0:46
    • 2. Understanding Cryptocurrency

      9:18
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About This Class

This is part 1 of the series and the purpose of this course is to give people who are confused about cryptocurrency a better understanding of what cryptocurrency actually is and how it works in the grand scheme of things.

In this course you will learn the following:

  • What Cryptocurrency is

  • How Cryptocurrencies Work

  • How Cryptocurrency Value is Determined

  • What Cryptocurrency is Used For

  • and finally why people choose to invest in Cryptocurrency

Meet Your Teacher

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Tay Wilkins

Teacher

My goal is to provide you with the tools and knowledge to unlock your full potential. My courses will convey how to strengthen your focus, build confidence as well as direct you to a creative and intelligent approach to achieving success.

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Transcripts

1. Introduction: Hi, My name is today and welcome to today's course. In a few minutes you will learn what this course is about. How this course can help you feel free at any time during this course to leave a comment or no feedback is always appreciated. The purpose of this course is to give people who were confused about crypto currency, better understanding of what crypto currency actually is and how it works in the grand scheme of things. In this course, you will learn the following what crypto currency is, how crypto currency works. Hack up the currency value is determined what crypto currencies used for and, finally, why people choose to invest a crypto currency. 2. Understanding Cryptocurrency : So what exactly is Cryptocurrency? Crypto currency is a digital variation of money with crypto currency. All transactions are done online. Seven. It's a normal currency. Like the US dollar, crypto currency can be used to purchase goods and services, or it could be used to trade with other currencies. Crypto currency is designed for the purpose of exchanging digital information through a process known as cryptography. The first ever successful Cryptocurrency emerged from the invention of the Bitcoin by Satoshi Nakamoto. This then paved the way for the creation other digital currencies with the primary purpose of competing with Bitcoin. So how exactly do Cryptocurrencies work? The reason why Cryptocurrencies are in such high demand right now is because Satoshi Nakamoto successfully found a way to build a decentralized digital cash system. So what exactly is a decentralized caste system? A decentralized system is a peer to peer system powered by the users without having any third party central authority or middleman controlling it. But this means is that no central bank or the government has a power over this system. Centralized networks heaven issue in a payment system called double spending. What this is essentially is one entity spending the same amount twice. An example of this is when you purchase goods online. You often get charged unnecessary and expensive transaction fees. Usually, this is done by a central server that keeps track of your balances, so getting back on track the system crypto currency uses is commonly known as Blockchain crypto. Karsi is derived from the word cryptography, which refers to the consensus keeping process secured by strong cryptography. The way black chain works is it managers and maintains a growing set of data blocks. And this is by using the decentralized or peer to peer network and Blockchain. Once a piece of data is recorded, it cannot be altered or changed at the end of every transaction. Once confirmation is complete, the entire network is notified almost instantly of the transaction. Transaction includes a process where person A gives X amount of Bitcoins to Person B and its sign by person A's private key. After sign it transaction is broadcasted in the network. The information is sent from one peer to every other pier on the network. Confirmation is crucial in any crypto currency system. Confirmation is everything. When the transaction is not confirmed, it has the possibility of being hacked or forged once the transaction is confirmed, that's it. It's set in stone. It can't be reversed. It can't be hacked. It is not Forge a ble and becomes a permanent historical transactional event within the Blockchain. Think of the Blockchain as a one line ledger of sorts, where all transactions are recorded and made visible to the whole network. This comes to show that cryptocurrencies are not secured by people or trust, but by very complex mathematical equations is very secure, and it's highly unlikely that the address of a currency is compromised. So who or what confirms the transactions? Then this role was taken by crypto miners. Only miners are able to confirm a transaction. This is their role in the crypto currency network. They've record transactions, verify them and disperse the transactional information within the network. For every completed transaction monitor and facilitated by the miners, they are rewarded with a token of crypto currency. So how does this mining thing work? Miners have to be able to solve cryptologic puzzles, which are a set of very complex mathematical questions. In the case of Bitcoin, these complex mathematical questions are set by Satoshi Nakamoto himself. If you have successfully solved the puzzle as a minor, you can build a block and add it to the Blockchain. So why miners miners are needed because of the very nature of the decentralized network where there is no authority to delegate tasks. So how do you become a minor that technically anyone can become a minor? In order for you to be a minor, you would need to be able to solve the very complex mathematical equations. For this, you would need a system like a computer with a decent amount of processing power. Another thing is that a minor is also given permission to add a crypto currency transaction to the system, which automatically grants him a specific number of Bitcoins. This is the only way to create valid Bitcoins. Bitcoins can only be generated if in minor can solve a cryptographic puzzle. The level of difficulty increases with the amount of computer power than minor invests. How exactly our crypto currency's value determined the value of cryptocurrencies are dependent upon the market, where the prices of various crypto currencies very ah lot and is one of the most fluctuating in volatile markets to date. The price of Cryptocurrencies, like most other products, is dependent on supply and demand. If more people demand a particular currency is short in supply than the value increases, more units are mined by miners to balance the flow. However, most currencies limit the supply of their tokens using Bitcoin as an example. Again, Bitcoin has a cap of 21 million tokens. Therefore, Bitcoin supply will decrease in time, and it will reach its final number in 2140. This also explains why Bitcoin's value is higher as compared to other cryptocurrencies. So what exactly is crypto currency used for? CRYPTOCURRENCIES can be spent for many different purposes, and the best part is all transactions are completed online. There are three different turns, actions that can be performed when using crypto currency, Bitcoin trading, personal spending and crowdfunding. First, we'll talk about Bitcoin trading. Bitcoin trading could be very profitable for both professionals and beginners. The market is knew where arbitrage and margin trading is widely available. The currency's high volatility also plays a major role in bringing new investors to the trading market. Compared to other financial currencies, Bitcoin has very little barrier to entry if you already own Bitcoin, you can start trading almost instantly. Moreover, Bitcoin is not traditional currency. That simply means the price is not related to the economy or policies of any single country . And unlike stock markets, that is no official Bitcoin exchange. Instead, hundreds of Bitcoin exchanges operate 24 7 around the world. Next we'll talk about personal spending. You can use Bitcoin to purchase almost anything from buying cars and guns to traveling the world. Basically, any place. The exception Bitcoin as payment will allow you to purchase their goods. Last we'll talk about crowdfunding. You can donate your Bitcoin to crowdfunding projects. The best part is that you have complete control over the donation. So why crypto currency? Aside from being very secure and being run through a decentralized network, crypto currencies are considered investment vehicles, which may garner massive returns. This Eric Feynman ring a bell. This 12 yo started by collecting Bitcoin when it was $12 a coin back in 2011. He now reportedly owns 403 Bitcoins, which in today's market equates to somewhere over $6 million. Cryptocurrency transactions are fast and global transactions happen almost immediately in the network and are confirmed within minutes. Sister transactions are managed by a global network of computers. They do not take into account your physical location. It is possible for you to send your crypto currency to someone close to you. On the other side of the world, crypto currencies have a supply cant. This offers a high chance that the value of the currency appreciates over time. As mentioned earlier, Bitcoin will somehow reach its final number somewhere in 2140. There you have more control over what is going on in your account and how the system works and operates. This is due to the decentralized network of peers, which keeps a consensus on account balances and the transactions made as compared to your physical bank account, which can be changed and controlled by people you don't see and governed by rules you don't even know. Hopefully, this gave you a better understanding of crypto currency. Cryptocurrency is definitely an investment worth looking into. It is no doubt growing in use and acceptance every day and one day may merge as the currency of the future, and this concludes this course. Hopefully, you found his course useful If you did find it useful, please hit the recommend. Button it and follow for future courses. Thank you for taking the time to wash this to have a good one.