Cryptocurrency Explained | What is Cryptocurrency? | Cryptocurrency for Beginners |

Imagine you're having a conversation with  your friends now at some point in this  conversation someone's going to bring up  crypto currencies now crypto currencies  is something that everyone wants to talk  about but no one really knows how they  work so today I'm going to fix that  I am route from simply learning and this is  crypto currency explained since man  world currency has been a very important  part of our lives in the caveman era  they use the barter system now the  barter system involves goods and  services being exchanged among each  other so now we have a situation where a  caveman is exchanging seven apples and  getting oranges in return  now the barter system fell out of use  because it had some glaring flaws  now these flaws include having people's  requirements coincide for example say  you have Phi apples and your friend has  five oranges you want some of his  oranges now until and unless your friend  has a requirement for the apples that  you own he'll not be ready to make an  exchange for it there's no common  measure of value now since there's no  common measure in terms of which value  of a commodity can be expressed there's  a problem when you have to decide how  many apples you are ready to trade for  one orange or a mango, not all codes can  be divided or subdivided for example you  can divide a live animal into different  smaller units the goods cannot be  transported easily now unlike our modern  currency fits in your wallet or your  mobile phone the goods that you own  cannot be taken with you everywhere you  go after realizing that the barter  system then work very well  currency went through a few iterations  in 110 BC an official currency was  minted in thousand 250 AD gold plated  Florence was introduced and this was  used across Europe and from 1680 to 1980the   paper currency gained widespread  popularity and was used across the world  this is how modern currency as we know  it came into existence modern currency  included paper currency and coins credit  cards and digital wallets for example  you have Apple pay Amazon pay DM Pay  Pal and so on all of this was controlled  by banks and governments now this means  that there was a centralized regulatory  authority the delimited how paper  currency and credit cards worked now  imagine the scenario of doing an online  transaction here you're thanking your  friend for paying for your lunch are you  saying that you're sending the money to  their account now this transaction takes  place successfully but there are several  ways where this could have gone wrong  they could have been a technical issue  at the bank for example the systems  could have been  the machines weren't working properly  and so on that means there's a central  point of failure which is the bank the  users accounts could have gotten hacked  for example, they could have been a DDoS  attack or identity theft and so on or  the transfer limits for that account  were exceeded this is why the future of  currency lies with cryptocurrency now  imagine the transaction between two  people in the future one of them has the  Bitcoin app and there's a notification  asking whether they are sure they're ready  to transfer five bitcoins if yes  processing takes place here we're  authenticating the user's identity  checking whether they have the required  balance to make that transaction and  other things now after that's done the  payment is transferred and the payment  is received all of this happens in the  matter of minutes and is as simple as  that  this in turn removes all the problems of  modern banking there are no limits to the  funds you can transfer your accounts  cannot be hacked and there's no central  point of failure now as of 2018 there's  more than 1,600 cryptocurrencies  available now there are some popular  ones like Bitcoin litecoin it's Harry  amends each cash and a new  cryptocurrency crops up every single day  now considering how much growth they're  having at the moment there's a good  chance there's plenty more to come in  the upcoming years so what exactly is  cryptocurrency a cryptocurrency is a  digital or virtual currency that is  meant to be a medium of exchange  now cryptocurrency is quite similar to  real-world currency just that it does  not have any physical embodiment it also  uses cryptography to work the way it  does now some of the features of  cryptocurrency is that there's a limit  to how many units can exist with Bitcoin  this limit exists at 21 million now  after this, no more bitcoins will be  produced you can easily verify the  transfer of funds now the hashing  algorithms that Bitcoin uses makes it  very easy for users to determine whether  a transaction is valid or not they  operate independently of a bank or a  central authority they work in a  decentralized manner now new units can  be added only after certain conditions  are met for example for Bitcoin only  after the block has been added to the  blockchain will the miner be rewarded  with bitcoins and this is the only way  new bitcoins can be generated so what  makes cryptocurrency so special firstly  there's little to no transaction costs  now if you use the digital wallet you'll  know that if you're transferring money  from your wallet to your bank account  you lose some amount of money you have  24/7 access to money you can't just walk  up to your bank at 3 a.m.  morning and say that you want to  withdraw some money there are no limits on  purchases and Madras there's freedom for  anyone to use for example if you are  setting up an account in your bank you  need to do some amount of paperwork and  documentation with cryptocurrencies all  of that can be avoided international  transactions are faster the wire  transfers take about half a day to  transfer money from one place to another  but with cryptocurrencies  it only takes a matter of minutes or  seconds what's the crypto in  cryptocurrencies  crypto Tavistock or Prague Rafi it's a  method of using encryption and  decryption to secure communication in  the presence of third parties with ill  intent now this refers to third parties  who want to steal your data or want to  eavesdrop on your conversation  cryptography uses computational  algorithms like sha-256 which is the  hashing algorithm that Bitcoin uses a  public key which is like a digital  identity of the user with he shares with  everyone and a private key which is a  digital signature of the user which he  keeps hidden now let's talk about a  normal Bitcoin transaction first you  have the transaction details now this  details who you want to send it to and  how many bitcoins do you want to send them  then it's passed through a hashing  algorithm for Bitcoin we use the sha-256the   algorithm the output that you obtain is  passed through a signature algorithm  with the user private key now this is  used to uniquely identify the user this  output is then distributed across the  network for people to verify this is  done by using the sender's public key  the people who verify the transaction to  check whether it's valid or not unknown  as - now after this is done the  transaction and several others are added  to the blockchain where it cannot be  changed again if the concepts of hashing  seem a little difficult to you I would  suggest you click on the top right  corner and watch the blockchain explain  video so that you can understand better  now the sha-256 algorithm like I told  you earlier look something like this  now seeing how complicated it looks i'm  sure it's safe to say that the  encryption is very difficult to hack  today we will be focusing on two major  crypto currencies Bitcoin and ether now  bitcoin is a digital currency that is  decentralized and works on the  blockchain technology uses a  peer-to-peer network to perform  transactions let's talk about ether  ether is a currency that's accepted in  the Ethereum Network now the etherium  network uses blockchain technology to  create an open-source platform for  building and deploying decentralized  applications now let's talk about the  similarities  VidCon and ether are the biggest  and most valuable cryptocurrencies in  the market right now both of them use  blockchain technology which is nothing  but a technology that involves  transactions being added to a container  called bloc and creating a chain of  blocks in which data cannot be altered  currency is mine using a method called  proof-of-work which is a form of  mathematical puzzle that needs to be  solved before a block can be added to  the blockchain finally these are widely  used across the world now let's talk  about the differences with Bitcoin, it is  used to send money to someone this is  very similar to how real-life currency  works with ether it is used as a  currency within the Ethereum Network  although it can be used for real-life  transactions as well Bitcoin  transactions are manual which means you  have to personally perform these  transactions with ether you have the  option to make these transactions manual  or automatic or programmable which means  that these transactions will take place  when certain conditions have been met for  Bitcoin it takes 10 minutes to perform a  transaction which is the amount of time  it takes for a block to be added to the  blockchain with ether it takes about 20  seconds to do a transaction no  blockchain is used as money for real  my transactions and ether is used to  power the Ethereum network and power  real-life transactions as well ether is  used as a fuel within the Ethereum network  to power both of these things now there  is a limit to how many bitcoins can  exist which is 21 million we supposed to  hit this number by the year 2140  ether is expected to be around for a  while but not to exceed 100 million  units the Bitcoin is used for  transactions involving goods and  services and ether use blockchain  technology to create a ledger to trigger  a transaction when a certain condition  is met for Bitcoin we use an algorithm  called associate 256 for hashing and  with a theorem, we use eg hash as of July  23rd 2018 one Bitcoin equals seven  thousand six hundred sixty-eight dollars  for ether, it costs four hundred and  sixty four dollars now what's the future  of cryptocurrencies  the whole world is clearly divided when  it comes to cryptocurrencies  on one side you have supporters like  Bill Gates Al Gore and Richard Branson  who say that cryptocurrencies are better  than regular currencies on the other  side we have people completely against  it people like Warren Buffet Paul  Krugman and Richard Schiller who are  both Nobel Prize winners in the field of  economics they call it a Ponzi scheme  and means for criminal  in the future, there's going to be a  conflict between regulation and  anonymity since several cryptocurrencies  have been linked with terrorist attacks  governments would want to regulate how  cryptocurrencies work on the other hand  the main emphasis of cryptocurrencies  is to ensure that their users are kept  anonymous by the year 2030  cryptocurrencies would occupy 25% of  national currencies which means the  significant chunk of the world would  start believing in cryptocurrency as a  mode of transaction it's going to be  increasingly accepted by merchants and  customers and it will continue to have a  volatile nature which means prices will  continue to fluctuate like they have  been for the last few years with that  we've reached the end of another video I  hope you guys found this informative and  helpful if you have any feedback or  doubts put them down in the comments  below we'll be happy to help you thank  you for watching and stay tuned for more  from simpler hi there.