Intuitive CryptoCurrency?
How would cryptocurrencies be explained intuitively? I tried reading about bitcoin but most articles explain broad concepts ambiguously, and I want to understand the concepts so I could potentially make a cryptocurrency myself. So, here is my intuitive understanding of it. With online currencies usually there is a central service that steals some of the money when you make transactions? You don't want that so you directly do transactions from one person to the other, perhaps by passing a code that is worth value to someone else. OK, but this has problems because of double spending. A person cannot be sure if the currency has already been spent. So that's why there's databases that everyone has access to and everyone writes to that stores the amount of money everyone has. How would the databases verify that you are in fact doing the transaction and not someone saying that they are doing it? Through public and private keys, right. How that works is that each person has a private key that encrypts a specific code, and everyone has access to the public key that is paired with the private key. If that code, when decrypted by the public key, is in the correct format, then it can be verified who is making the transaction, because nobody else has the private key. But the code that needs to be decrypted must be different every time because if it's the same every time, whoever sees the code can use it to spend money. So maybe you make a rule that when you decrypt the code it has to form the current date to verify the transaction. The public key would be stored in the database with the corresponding amount of money connected to the public key. Also when you make the transaction you say which public key you want to give money to and which public key you have, and how much money you want to give. A lot of people's computers verify the transaction so it's safe. Why is mining even necessary? I might just be dumb because I don't have much cryptography experience, I do have some programming knowledge however.
https://ift.tt/2k8suZ6
Comments
Post a Comment