Cryptocurrency is the first important application of blockchain.

A cryptocurrency is a currency designed to have no central ownership; all transactions are uniquely encrypted.

 

Blockchain technology is the infrastructure that allows cryptocurrencies to be stored and amounts to be transferred through the use of digital signatures.

Table of contents

1. Cryptocurrency
2. Transactions
3. Proof of work
4. Ethereum
5. Cryptocurrencies
6. Nodes on Ethereum
7. Accounts
8. Read more
9. QUIZ

 

Using Bitcoin involves creating a public key, a private key and a bitcoin address. The most common addresses are P2PKH (https://bitcoin.org/en/glossary/p2pkh-address ) e.g. 1BsBzuBTT8r4auWrxZr8sGVtoRhGg9ndUC which are equivalent to a bank IBAN, but without the bank.

 

The address is created so that if a character is typed in incorrectly by mistake, the address itself is recognised as invalid and transactions are rejected, so it includes a checksum.

For security and privacy reasons, the address is generally used for only one transaction, and digital wallets are used for this function.

The system that is used to ensure that all copies of the blockchain are intact and as identical as possible and therefore give an unambiguous presentation of the state of the blockchain is the proof of work.

Another important application of blockchain is Ethereum (https://ethereum.org/) is a particular Blockchain, an ecosystem that serves to create decentralised Dapps applications, unlike Bitcoin which aims to create an environment to perform digital currency transactions without the need for intermediaries. Thus, Bitcoin opened up the world to blockchain technology, rather Ethereum aims to create applications in one big computer shared between all nodes in the world. In Ethereum you can create your own cryptocurrency or games using Ethereum data and smart contracts that regulate the exchange of transactions based on criteria defined within the contract. All this is done using Solidity, a programming language for creating smart contracts. The possibilities opened up by using Solidity are enormous and are beginning to spread to all areas of finance, production and business.