Glossary For Beginners In The World Of Digital Currency
Do you keep hearing people talk about blockchain, bitcoins, and ICOs with no idea what they mean? - Here's a short glossary to help you understand what the fuss is all about.
Decentralized coins/digital coins
These coins are basically digital money that is secured through encryption technology (cryptocurrency). Digital currencies are not issued or managed by any country or central bank. Thus, their value is not under their control, but rather is determined by the agreement of and according to the demand among the network of users.
The bitcoin is the first digital currency used, and the first and most famous application of blockchain technology.
A digital wallet is software that is linked to the digital currency network. It enables the user to hold, transfer, and receive digital currencies. Every digital wallet has two "keys"-a public key and a private key. The public key corresponds to the bank account number, i.e. the address to which the money is transferred. The private key is the key to the safe. Only its owner can perform transactions with the digital currency in the wallet.
Blockchain is a technological concept that enables secure activity on the internet without needing a central management entity. Blockchain serves as a digital ledger of all the transactions performed on it since it began. The information maintained in blockchain is stored in cells called blocks, which are linked together in chronological order (in a "chain of blocks"). Upon completing any transaction in blockchain, it is documented and automatically stored in the devices of all users of the system. The structure of blockchain technology and its decentralized nature provide the structural security of the blockchain. The chaining of the blocks does not enable information stored in blockchain to be altered without changing the definitions of all subsequent blocks in the system, which is practically impossible. Moreover, the decentralized nature of blockchain does not allow for the system to be compromised without taking control of the majority of the devices connected to blockchain, which, due to the number of users of the bitcoin blockchain, is practically impossible as well.
Blocks are storage units in which all information maintained in blockchain is stored. So, if blockchain is likened to an accounting ledger, then...
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