Who was Satoshi Nakamoto? Why is cryptocurrency the new topic today? Is crypto really the future? There are too many questions to dwell upon but first, let’s understand the ideology that went behind cryptocurrency.
Satoshi Nakamoto, a pseudonym addressed to the inventor/s of bitcoin, released a white paper in 2009. The paper stated that bitcoin is a peer-to-peer platform for sending and receiving electronic cash. The objective of the paper was to show how bitcoin virtual trading can avoid cash loss of third parties involvement.
Imagine meeting your favourite singer at a concert. You were too nervous to shake hands with them, so you asked your friend to do so by addressing your name. Hands shook, words exchanged. The singer glanced and smiled back at you. That’s the end of your fan moment. You grabbed your friend’s hand and pulled out an uncanny handshake. Now think about how your experience could have been different if you would have shaken hands with the singer directly. Your friend here is a third party that we see in all digital transactions today. You have to pay them for simply transacting money big or small.
Bitcoin aimed at eliminating this process. Having free transactions wasn’t the objective. Privacy and security was the big question. Hence having a decentralized crypto blockchain led to the change from digital fiat money to complete personal finance management. Bitcoin wasn’t the first cryptocurrency that came into existence. There were a few earlier in 1991 but they didn’t seem to work out as they had third parties like government, financial institutions & banks involved.
Today it is more viable to bring secure proof than trust in any transactions. Crypto helps with the same. Crypto transactions are scattered to computers across the world. These devices are running software aligned to a particular cryptocurrency. For instance, bitcoin software manages bitcoin transactions. These computers that participate in managing the transactions are called nodes and this management process is called mining. Today even you, me or anybody can be a miner. Every miner is rewarded with some set of cryptocurrencies. Why do we need transparency? We completely rely on the government for any data crunching or numbers for events that took place on a large scale. We don’t really know how many people got covid-19 unless otherwise specified by the government. Hence with a crypto blockchain, records and transactions are completely transparent and a public ledger.
But if it is transparent and constantly under public scrutiny, how do we know it’s safe? Guarded by tight cryptography, collapsing a blockchain is next to impossible. Even if one was able to hack one transaction block from the chain, he/she would have to bring down the 259.2 million bitcoin transaction blocks (2019 data figure) to avail the hacker’s gold. Today you have safe crypto mobile trading platforms that help you invest in small fractions. This helps you learn & invest while you watch the graphs for your favourite currency.