Cryptocurrency

Cryptocurrency is a digital or virtual money. It is stored in what we called “wallet”. Wallets are usually provided by cryptocurrency exchanges. There are a lot of exchanges out there where you can register for a crypto wallet for different cryptocurrencies but I am not going to that topic. Also, we can store cryptocurrency in our computers or smart phone. Of course, you have to have an internet connection in order for you to get the updated “Blockchain” record. Cryptocurrencies can be used for payments for different companies. The most famous cryptocurrency in the world is “Bitcoin”. I have found a list of companies who accepts bitcoin as a payment. You can find it here: https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/. Below are the top 10 cryptocurrencies in the world: You noticed that there is a “Price” column in the image above. Because we can buy it just like buying foreign currencies. On the top list, if you want to exchange your US Dollar for a 1 Bitcoin, it will cost you $4,153.83 (as off August 19, 2017).

The good side of cryptocurrency

• Secured – It uses cryptography. Cryptography is an encryption technique used in computer networks usually when doing transactions. It is very important to have this because it encrypts the data throughout the internet. Encryption is a way to hide the information of a data. It uses “keys” to decrypt the data.
• Decentralized – Cryptocurrencies does not rely on a third party or a central organization. No one can control the funds exepct for the owner.
• Transparent – All transactions are recorded in a blockchain. It is distributed to all users around the globe. No one can hide anyone’s transactions. No corruption.
• Privacy – You do not have to disclose any personal information to anyone. You can transfer and accept cryptocurrencies without giving away your personal details.

The bad side of cryptocurrency

• Computer malfunction – Cryptocurrencies can be stored in any computer of smart phones. In the event of malfunction of your devices, cryptocurrencies you own will be gone. It is a good habit to backup your cryptocurrencies in another storage.
• Hacking exchanges – There are a lot of cryptocurrencies exchanges out there. You can store your cryptocurrency in the wallet they provide for you. But of course, anyone’s system can be hacked. When the exchange was hacked, your cryptocurrency can be compromised.

Blockchain basics

So what is a Blockchain? Blockchain records all transactions in a cryptocurrency. It is a public ledger which is distributed into a computer network. This means that there is no central authority or government owns the system. Since the records are distributed to all computers connected to blockchain, it cannot be easily take down. Meaning, this is a very safe and secure system.

Cryptocurrency started in the late 1980s. It didn’t came out so well because of a problem in the blockchain. All transactions before in the blockchain cannot be updated instantly which caused inconsistency of the record. Last 2009, a cryptocurrency was released called Bitcoin. It is now the most famous cryptocurrency in the world. Why? Because it solved the problem in the blockchain. All records are updated instantly because it is distributed in the network. MONSPACE released it’s own cryptocurrency, MSDollar. MSDollar‘s goal is to be one of the top cryptocurrencies in the world!

Blockchain transaction

I will explain this as simply as possible. Let’s give an example: Anna owns 10 MSD John owns 20 MSD  Anna wants to send 5 MSD to John  John will send its “MSD address” to Anna. It is a unique combination of letters and numbers.  Anna will send 5 MSD to John’s MSD address A “private key” and a “public key” will be generated. A private key is used to “sign” the transaction to ensure that it is safe accross the internet. A public key is used for the verification of the public. Anyone can use this public key to verify the transaction in the blockchain.  Anna will sign using the private key  for the transaction.  This is the time where the role of “miners” comes in. Miners are techy persons who use high powered computers to solve algorithms and mathematical problems. The public key of Anna will be used to verify the transaction. This is required in order for the transactions to be recorded in the blockchain. For every solved algorithims, miners are rewarded of cryptocurrencies that they are mining.  It is now recorded in the blockchain! This transaction will be distributed to all users of the blockchain.  Since John also got the updated blockchain, he can now view the 5 MSD gave by Anna. At the same time, the amount of John’s MSD will be updated. It will be 25 MSD. So that’s it! That’s the basics of cryptocurrency and blockchain.