The world of cryptocurrency moves quickly. Blockchain technology is constantly evolving and with it the market for innovations and businesses utilizing the technology. Buying, exchanging, sending, and tracking cryptocurrency is critical in this future world of digital currency. We provide the tools and knowledge to help you participate in the future world of money.
What is CryptoCurrency?

Cryptocurrency is a digital token designed to work as medium of exchange that uses cryptography for security. Cryptography makes the system very secure. Decentralized in nature, cryptocurrency typically works through blockchain, a distributed ledger technology that serves as a public financial transaction database. The first blockchain, and cryptocurrency, was Bitcoin. Bitcoin has been a catalyst for an entire market of cryptocurrencies which has grown significantly. Since the release of Bitcoin, over 4,000 altcoins (cryptocurrency that is not a Bitcoin) have been created.

What is Blockchain?

A blockchain is a public ledger using the underlying infrastructure of the Internet that chronologically records and stores the history of every action ever recorded on a specific network. Information and transactions are bundled into blocks and posted to the chain as they are generated. The blockchain is maintained by nodes, or interconnected computers on the network.  These nodes and interconnected computers execute algorithms to form a block. Once a block is formed and validated by the nodes and computers, it is posted on the blockchain. The stored data is encrypted.

When individuals transact business over the internet using a blockchain, they need a private key and a public key. The public key is used to send and receive payments. The private key secures the payment. When both are present, proof of ownership and digital identity is established.

A blockchain uses the entire network to ensure the validity of a single block. Instead of a central authority, the blockchain requires a majority of the nodes to reach a consensus and validate through math that something has occurred. Different consensus mechanisms exist, but the most common one is called proof-of-work. Once a block has been added to the blockchain, it becomes an immutable record.

Blockchain has been called the ‘next Internet’, or the Internet of Value. There are many different blockchains including public, private, and consortium blockchains.

Public Blockchain

A public blockchain allows anyone to join and become a node. All transactions are publicly available and the value of the transaction is public. On a public block, the wallet ID is visible as opposed to the name or ID of the person or entity that controls the wallet.

Private Blockchain

A private blockchain has identified participants. It is different from a public blockchain as it controls who is allowed to participate in the network, execute the consensus protocol, and maintain the ledger. 

Consortium Blockchains

A consortium blockchain has predefined rules, roles, and consensus mechanisms. In a consortium blockchain, a few selected nodes are predetermined. In contrast to a public blockchain, it does not enable everyone connected to the internet to participate in the verification of the transaction. In contrast to a private blockchain, it does not enable a single company to have full control.

What is Bitcoin?

Bitcoin is a digital currency, that runs on blockchain technology. Unlike prior payment systems, bitcoin is not controlled by any government. This is unique in the world of finance. The Bitcoin blockchain is maintained and secured by a community of users called “nodes”. Bitcoin is a peer-to-peer network, there is no need for a third party to facilitate transactions between a buyer and seller. Since no central authority is responsible for bitcoin, it cannot be debased, controlled or used as a political tool. Once transactions occur, they’re final and create a secure record of each user’s actions on a network. These actions are permanent on the blockchain. Each user is given a digital identity when they log onto the network. A public key and private key create the digital identity. A user’s public address is what is used to send and receive coins. The user’s private key is specific to the user and should not be shared. Bitcoin is the first and currently most dominant cryptocurrency with a hard cap of 21 million bitcoin.

What is Ethereum?

Ethereum is a distributed public blockchain network. On the Ethereum Network, servers and clouds are replaced by nodes, or interconnected computers, that are run by users around the world forming, what is in essence, a global computer. Ethereum is a platform for sharing information across the globe and cannot be manipulated or changed. Without a central server, there is no main authority to change or shut down these programs without the entire community knowing. Each and every one of these nodes store and validate all of the transactions and info that are processed on the network. Ethereum’s goal is to use blockchain to replace internet third parties — those that store data and keep track of complex financial instruments. The possibilities of applications that can be built on top of Ethereum are vast. Ethereum expands on bitcoin by harnessing blockchain capability for computer code. As the Ethereum network grows it will change the way business is transacted on a daily basis.

What are Altcoins?

Altcoins can be defined as any cryptocurrency that is not Bitcoin. Many of the altcoins are built up on the basic framework provided by Bitcoin. Thus most altcoins are peer-to-peer, involve a mining process by which users solve difficult problems to unlock blocks and offer efficient and cheap ways to carry out transactions on the web. There are hundreds of smaller coins serving different purposes. Even with overlapping features, altcoins vary widely from each other.

Where is it stored?

Cryptocurrency is stored on cryptocurrency wallets that are used to both store and send coins from one address to the other. The wallets are generally maintained by third parties through software applications. Some wallets allow users to allocate value to different coins on the same blockchain. Today, wallets are split into two categories, hot storage and cold storage. A hot storage wallet is a maintained online. A cold storage wallet is maintained offline. The hot storage wallet is more vulnerable to hacking than cold storage wallets since the cold storage wallet is maintained offline. Digital currency exchanges use a password protected hot storage wallet that users can use to transfer the funds to a cold storage wallet. Today’s wallets include but are not limited to: Ledger Nano S; Ledger Blue; MyEtherWallet; Coinbase; JAXX.