Author: Zen and the Art of Computer Programming
1 Introduction
"Cryptocurrency" has become the hottest topic in the past few years. Since the birth of Bitcoin in early January last year, its popularity has reached a new low in the past ten years, and its market value has grown from the initial $100 billion to nearly $1 trillion. It has successfully transformed the central bank in the financial field from a single role to an important tool that connects value among various participants. In these years, digital currency has become synonymous with real world currency, one of the international reserve currencies, the main reserve currency of the euro zone, etc. are all digital currencies.
This article will systematically explain in easy-to-understand language, deeply analyze the core concepts and principles behind digital currency, as well as its application scenarios, and then summarize the current status and future trends of digital currency. Hope to help readers better understand the theoretical basis, technical realization and application trends of digital currency.
2. Explanation of basic concepts and terms
What are cryptocurrencies?
Cryptocurrency (crypto currency), also known as "encrypted digital currency", is a digital currency or payment system based on cryptography technology. Its core mechanism is encryption, which means that transaction information is encrypted and confidential, and users' personal identity information and transaction records cannot be read. All data in the cryptocurrency system is stored on a globally distributed network, and transaction information is only transmitted between two parties.
Cryptocurrency is a highly decentralized system consisting of many independent nodes that compete to conduct transactions, forming a distributed ledger that is highly transparent to the operation of the entire system. Its infrastructure is driven by algorithms, and the entire system automatically matches the computing power resources provided by each participant when it is running, and ensures that there will be no single point of failure. Since there is no intervention of real economic participants in cryptocurrency, it can achieve seamless connection on a global scale, and has strong reliability and liquidity.
History of cryptocurrencies
Cryptocurrency was born in 1997, the first cryptocurrency - Litecoin &