Cryptography was developed around WWII as a medium of securing conversations between two parties so that no third party can intercept it. This high end technology was for securing conversations between two people by following a set of certain rules and protocols ,but with rise in computer technology and mathematical approach , it has been developed as a way of securing conversation, transactions and information worldwide .
The first cryptocurrency to be known till now is Bitcoin/s , also the most expensive currency till date ( 1 Bitcoin=884122.02 INR or 13899.00 US Dollar at 12 jan 2018 at 07:31 pm). The maximum number of bitcoins available is 20999999.9769 BTC. It was developed by Santoshi Nagamoto in late 2008 and then released Bitcoin v0.1 on 2009-01-09 20:05:49 UTC .
“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority. – Satoshi Nakamoto, 09 January 2009, announcing Bitcoin on SourceForge.”
This was not the first time digital currency was introduced , earlier attempts were also made ,e.g Digicash, but the single most and fundamental key in bitcoin which made is more prominent was that is was decentralized ,no third party like bank , government or company had control over , it was nowhere stored in server of any third party. It was just in the local nodes server (sender and receiver device ) so that you can validate transactions yourself automatically , it also ensured that no manipulation of data is done .
Understanding Cryptocurrency , Bitcoin and Blockchain
Cryptocurrency is as just like normal currency and bitcoin , ripple , doge . Litecoin are its different forms ( e.g cryptocurrency can be thought as dollar , and bitcoin ,Litecoin ,ripple, etc can be understood as American Dollar ,Australian Dollar, and Canadian dollar, etc )
Blockchain : The mind behind this conceptualization is anonymous known as Satoshi Nagamoto , who remains to be unknown from 2008 to till date. Blockchain is a continuous list of ledgers (known as blocks) which are hosted by cryptography. Every block contains a hash pointer , which points (or links) to the previous block , transaction history and time interval .Due to their design block chain (blockchain) is inherently resistant to manipulation of data which it stores. It can also be explained an open ledger that can account and record transactions between two parties in a way that it is verifiable ,permanent and incorruptible.
￼ Image courtesy = Blockgeeks
Blockchain is verifiable ,permanent and incorruptible as it is P2P or N2N i.e person to person or node to node also commonly said as end-to-end encrypted ,no third person or node is involved in it .One of the key factor makes it permanent i.e that record of every ledger and transaction is present over every network making ,also this makes it reliable as every ledger and transaction is verified over the network by the mining nodes which get rewarded with bitcoins in return (for more information about bitcoin mining scroll down) . Every time a new block is added it is verified by the network and then processed .It is also incorruptible as it will take a very big network ,larger than we have , to override the ledger and transactions.
< Here one point is to be noted that the transaction is immediate but conformation takes specific time ( do not worry its only a few microseconds >
What is mining and Who are Minners ?
Mining generally refers to extracting something out of huge resource ,which stands correct here also but the difference here is that it is not about coal, diamond ,petroleum or etc , here it is about extracting digital currency from a huge resource of networks which is also limited like other natural resources (i.e 20999999.9769 BTC). Mining here is not going into the network and extracting cryptocurrency , it is way far from that . The details of every transaction and ledger are stored in block which is linked with blockchain through pointer , as mentioned earlier transaction is instant but verification takes times , and this verification block building work is what minners do . They group their server or device in a huge network and start to build block and then solve complex arithmetic problems (it is what verification is referred to ) which validate the transactions or blocks in blockchain and on success of every athematic problem they are rewarded by certain Satoshi (One bitcoin is equal to 100,000,000 Satoshi ). It is where the transaction fee of bitcoin coin goes ,which is very low. From all the stated above it becomes clear that Minners are servers or devices of person, company or institution who solves complex arithmetic problems which then validates transaction and hence get rewarded with Santoshi for their work . Every cryptocurrency does not offer mining like bitcoin ,one such example is ripple.
Bitcoins can only be created if miners solve a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocurrency token that can be created in a given amount of time. This is part of the consensus no peer in the network can break.