Introduction to Blockchain and Crypto Currency and How it Works


What is a cryptocurrency and what is blockchain - These are important terms to understand. The blockchain essentially is the software or technological mechanism underpinning a cryptocurrency - what is the blockchain as a software mechanism or as a software technology an example of how a cryptocurrency would work uh that it is a medium of exchange that it that is digital it is encrypted and decentralized this is an example of how a cryptocurrency would work that is underpinned by the technology of blockchain for example someone requested transaction then the transaction is broadcasted to a P2P Network or a peer-to-peer network of computers now this is known as the nodes then that the network of nodes will validate the transaction against the different users then this verified transaction would involve the cryptocurrency or a token or a crypto for example once it is verified then it creates a new block so this new block is then added to the existing blockchain.


Remember that the blockchain is the underlying software technology and then you have the different nodes which are which refers to the peer-to-peer network of computers and as the network is validated or the nodes are valid are validated then a new block is created and that new block is now formed as part of the blockchain then this transaction is is com is concluded and complete, this is how a crypto transaction takes place is that the transactions are validated against a blockchain what is cryptocurrency cryptocurrency is a medium of exchange it is encrypted and created and stored electronically in the in the blockchain which uses encryption Technologies to control the creation and monitor units for verification purposes, it has no intrinsic value it has no physical form and its Supply is not recovered by a central bank so it is a decentralized form of an asset that is created through different nodes on a computer that controls the and creation of this of this crypto and generally most cryptos they have what is called a white people a white paper that underpins the concept of the crypto insha'Allah we will come as we go forward in terms of whether it is Sharia compliant whether whether it's a currency whether it is an asset of value Etc


This is basically what is a a crypto in other words a crypto is a token that is backed by a blockchain or the software technology called the blockchain next slide so this is how a blockchain works is that a transaction is requested a block is created the block is sent to at every node in the network the nodes are validate the transaction and there is a proof of work and then the block is added to the blockchain so this is how the blockchain works where crypto or tokens Etc are created.


There are four types of cryptocurrencies the first is a store of value an example of that is a Bitcoin the second is a digital currency like Libra which has been uh punted by the likes of Facebook you have a security token and then you have a utility token like ethereum.


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