– A blockchain is a public ledger that records every transaction ever made in cryptocurrency.
– Each block is like a page of the ledger, containing a timestamp and links to the previous block.
– To win the right to write the block, cryptocurrency miners must win a race to solve a math problem.
– At its core, a bitcoin is an input written on a public ledger that records ownership, stored in a crypto wallet.
– Bitcoin mining is actually a lot like the way coins are made today.
– The “minting” is actually writing on the public ledger, or blockchain.
– The input records that the coin went into their wallet.
– this first “input” into their wallet is the creation of the bitcoin.
– If they spent it or sent it to someone else, that would be a publicly recorded “output”.
– A mining rig is a very powerful computer set up to solve very hard math questions.
– It costs tens of thousands of dollars in electricity to mint just a single bitcoin.
– Cryptography is the science of securing information.
– A crypto wallet is secured by a set of private keys–a string of words that can unlock and access your wallet.
– By a process called “hashing”, your private keys are processed as a string of data by an algorithm, which generates a public key.
– This process is almost impossible to reverse.
– The public key is generated from an anonymous private key not linked to your digital identity.
– Decentralized applications (dApps). Decentralized because the applications are able to register transactions without a central authority approving them.
– A smart contract is a way to make it so two computers, or networks, can talk to each other and have transactions without a middle man.
– Cryptocurrency is a “secret” currency, which is both anonymous and secure.
– Altcoins are any other cryptocurrency besides bitcoin.
– Some of these altcoins are based on blockchain (remember, that means ledger) technology, while others are based on the concept of decentralization.
– Proof of Stake relies on proving you have a collection of coins to win the right to process transactions, write the next block, and mint new coins.