Cryptocurrencies and bitcoin - all you need to know

The new face of Money, Cryptocurrency.

The year 2009 was the beginning of it all; the era of Cryptocurrency. When the first coin was announced, it seemed like it was nothing nobody wanted to get involved with. I mean, why would anyone need a coin? And for what purpose? They would have asked. But ever since the use of Bitcoin became pronounced, there has been a creation of numerous cryptocurrencies. As of September 2017, over a thousand cryptocurrency specifications has been created.

A cryptocurrency (or crypto currency) is a digital assest designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency (www.wikipedia.org/wiki/Cryptocurrency)

For the purpose of understanding what crypto currency really is, here are some few important terms and pointers you need to know.

1.   Altcoin:

this is a collective name given to other coins that are not Bitcoin. There are over 700 cryptocurrencies which include Golem, Monero, Etherum, Ripple, Reddcoin and many others

2.      BTC:  

A unit equivalent to one Bitcoin.

3.      Bitcoin:  

Bitcoin is a digital payment system (you can also see it a digital currency) operating independently of a central bank or government. Although it is not an official form of money, it is easily tradable and used for online transactions. However, it is the first decentralized cryptocurrency introduced on the third of January in the year 2009.

4.      Blockchain: or block chain,

(developed specially for Bitcoin) is a list of records, ledger books which acts a storage to transactions. It is in chronological order i.e. relating to or arranged according to temporal order, which is easy to navigate transactions if the need be.

5.      Cryptography:

The process of using codes to decrypt or encrypt sensitive data and information.

6.      Double Spending:

This is a fraudulent act of spending the same Bitcoin more than once.

7.      Fork:

This results from the process of updating a new software causing a spilt in the version of the cryptocurrency.

8.      Wallet:

This is a software / program that allows you to store, save and spend your coins. There are basically four types of wallets:

a.      Mobile Wallet:

These are applications you can have installed on your phones, tablets or computers. They usually include QR CODE scanning and phone-to-phone transfers for on-the-go transactions.

b.      Software Wallet.

These are programs you load onto your desktop or laptop computer.

c.       Paper Wallet: These are hard copies of your currencies, usually in forms of QR codes, which allows you to keep your currencies in hard copies.

d.      Web Wallet: These are usually gotten through exchanges, and stored on third-party servers via cloud computing. They can be accessed by any computing device.

e.       Brain Wallet

9.      Mining: is a process of adding and verifying of transactions records in the ledger books known as the block chain. It is an important part of the cryptocurrency not only because it verifies transactions but also creates new cryptocurrencies.

10.  Minting: The process of making new coins as a reward for verifying transactions in a block.

11.  Miners: they verify transactions and create new coins. Principally anybody can be a miner. A miner builds a block and adds it to the blockchain. As a form of incentive, a miner gets Bitcoins after solving a cryptographic puzzle.

12.  Node: A node is a computer connected to the Bitcoin network. It performs the function of validating and relaying of transactions.

13.  Virgin Bitcoin: This has never been spent before and is received by a miner as a block reward.