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Bitcoin: the first in a disconcerting virtual world of criptoassets.
The defeat of Christchurch Cryptopia cryptocurrency merchant is an indication that it is time for the silent majority to try and ignore the explosion of digital money to start paying attention.
While many of us were impressed by hitting our payWave without a problem, a group of computer geniuses were creating their own money – with some of them making their fortune in the process.
At the end of 2017 the cryptocurrencies flew high, but they fell heavily during 2018, when investors try to understand what this means.
On Monday, police were notified of "a problem involving potential unauthorized activities" in Cryptopia after losing what appears to be a million dollar currency in a security breach. The police announced they were putting together a dedicated detective team as they tried to understand what had happened. The Financial Markets Authority has also been notified.
READ MORE:
* Cryptopia: a very popular platform that has turned from one crisis to another
* The cybercurrency theft from Cryptopia fits a model
* Cryptocurrency traffickers cryptophan neighborhoods under police block after millions of suspects lost in violation
While trying to understand how development works, here's an (hopefully) direct explanation of what this bewildering new sector, movement or ecosystem, or whatever else you want to call, concerns.
But first a warning, the television host John Oliver described the cryptocurrency in this way: "everything you do not understand about money combined with everything you do not understand on computers".
What is a cryptocurrency?
IRD says: "In simpler terms, cryptocurrency is money that exists only digitally or virtually". Cryptocurrencies use cryptography – the process of converting text or numbers into an unbreakable code – and blockchain technology to regulate generation and verify the transfer of funds.
Cryptocurrencies can be transferred between people without the use of an intermediary, such as a bank. The ways to buy them include the use of online exchanges or participation in Initial Coin Offerings.
This is taken from a very useful Forbes article: "Cryptocurrency is designed to be decentralized, secure and unalterable, so every single transaction is encrypted.After the encrypted transaction is executed, it is added to something called" block "until a Fixed number of transactions has been recorded, which is then added to a chain, the blockchain, which is publicly available. "
What is an initial money supply?
IRD says that an ICO is used by start-ups to raise capital. In an ICO campaign, the cryptocurrency is sold to the first supporters of a project in exchange for legal tender or other cryptocurrencies, such as bitcoin or ethereum.
Where do cryptocurrencies come from?
This from the Cambridge Center for Alternative Finance from the University of Cambridge. "In the absence of a central authority, cryptocurrencies are created by a process called" mining ", usually the execution of a large number of calculations to solve a cryptographic puzzle."
Once again Forbes: Because the transaction blocks are heavily encrypted, "they are a bit like complicated mathematical puzzles that only a powerful computer-capable hardware can solve." "The process to solve the mathematical puzzles on these blocks and add them to the public blockchain (think of it as a ledger) is roughly mining: the miners verify the transactions, ensure they are not false and keep the infrastructure humming" .
The "tax" of the miner is the payment in the currency of the block, based on how much of that miner's hardware has helped to solve that puzzle. There! The coins are created.
Explain more about the blockchain?
Callaghan Innovation has published a great report on this material in December. He says that blockchain is a type of distributed ledger.
Great, so what is a distributed ledger?
Callaghan states: "A distributed ledger is a set of data replicated on many computers connected to the network: ideally, the computers on the network are in different positions and spread in many countries. The distributed ledger uses protocols so that the changes are constantly replicated on each computer and the data converges to an agreed known state A good metaphor is a spreadsheet with its data and validation rules replicated on many computers: when a cell is changed to an instance of spreadsheet, the rules indicate that the change is made on all instances of that spreadsheet. "
And back to the blockchain:
"A blockchain ledger is immutable, which means that data can not be removed or edited once it is published."
What is Bitcoin then?
Callaghan again: "Bitcoin was the first blockchain in the world: an anonymous person or a group of people under the name of Satoshi Nakamoto launched bitcoins in 2008 with the intention of creating a peer-to-peer version of money electronic". In the last ten years the value of all bitcoins in the world has gone from zero to $ 100 billion. "This rapid increase in value shows that people are increasingly trusting a distributed ledger and will assign an intrinsic value to a cryptoasset."
Oh yes, it's cryptoasset now – continues:
The Cambridge Center for Alternative Finance emphasized this point. In April 2017 he published something called his first global benchmarking study on cryptocurrency. The last month came out with what was called his second global benchmarking study by Cryptoasset. Readers who have noticed the subtle difference have been recognized for their cunning.
How much are all these cryptoassets worth?
Cambridge said that the aggregate market capitalization of the cryptoassets peaked above $ 800 billion in early January 2018, before falling to soar around $ 200b.
