Do you need a crypto 101? Even though cryptocurrencies and blockchain have been around since 2009, many people don’t have a clue about what any of it means.
Cryptography has been around for thousands of years, but along with many other technologies, has exploded during the information age brought by computers. Many information systems use them every day. Email, browsers, download and link verifiers, and others are examples of this.
But what does it have to do with cryptocurrency? What does “crypto” even mean? Keep browsing to find out all you need to know to get started!
What Does Crypto Even Mean?
Crypto is short for cryptography or cryptographic.
Encryption is the act of using a cryptographic algorithm to make normally understandable information unreadable to all but another party with the right cryptographic key.
One of the most notable uses for cryptography until recently was in warfare. It’s considered as munitions under the ITAR controlled by the US Department of State, in Category XIII (section b, subsections 1-3). As such, all encryption and cryptography tools and methods were classified until recently.
A good example of why is the Enigma machine. The Enigma machine was the British government’s primary reason for creating the first real computer, invented by Alan Turing. Breaking the encryption of the Enigma cryptography machine the Axis powers used during WW2 potentially saved hundreds of thousands of lives.
What Is a Cryptocurrency?
Today, cryptography is still used to encrypt sensitive information in business, government, and warfare. However, it’s used most famously in cryptocurrencies like Bitcoin.
Cryptography makes it possible for parties that have no trust to make transactions. This makes a so-called “trustless” network function, and 100% prevents a double-spend scenario under the “Byzantine general’s problem.”
Many people see the value in such a technology and actively participate. For years, there have been only a few ways to enter into cryptocurrencies and blockchain networks.
- “Mine” or perform work in exchange for cryptocurrency
- Buy coins direct from miners
- Buy coins from exchanges like Kraken or Gemini and trade them
- Use a crypto ATM or Bitcoin ATM, like ones supplied by ByteFederal
Cryptocurrencies use various cryptography algorithms to keep the network secure. Many of them use variants of the SHA-256 algorithm, which creates a “hash.” The hash is always the same number of digits, designated A to Z and 0 through 9.
The hash is always unique.
It also implements a verification tool called a “Merkle tree,” named after one of its inventors, Ralph Merkle. Hashing and Merkle trees go back as far as 1979 when the technology was patented. However, computers have only recently become powerful enough to perform this action on a large scale.
Your Crypto 101: Class Dismissed
Did you learn everything you need to know from this crypto 101 to get started in buying and selling cryptocurrencies like Bitcoin? We think so.
If you’re interested to know more about cryptocurrencies and cryptography, you’re in luck. Keep browsing our articles for the latest news on new cryptographic technologies as well as the history of different cryptocurrencies.
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