Definition of Cryptocurrencies (Bitcoin)

Many people around the world are looking for ways to economy alternatives to the established ones, which they judge controlled by an invisible oligarchic power. And these alternative forms have materialized in the so-called cryptocurrencies or cryptocurrencies.

These are nothing but foreign exchange that are exclusively maintained on the network Internet, which do not have the support of physical money, nor with a authority world-renowned bank, although eventually, banks can work with these currencies.

In fact, the vast majority of transactions we carry out today are virtual, without existing the physical support of a real currency behind, we only exchange bits between some accounts and other

After all, what is a currency? The ancient Romans used salt (something of great value at the time) to pay their legionaries and, from there, our modern term salary derives to refer to the salary we charge for something.

A coin is, therefore, a payment mechanism accepted by two parties to remunerate a job done, a service rendered or a good exchanged of hands. Its nature can be physical or virtual, the latter being that of cryptocurrencies.

Mathematical foundations

A cryptocurrency is based on mathematical algorithms. Although they are formally different, basically all cryptocurrencies have a remarkable similarity.

There are a series of servers or computers that, through complex calculations and each one checking the work of others, produce units of the cryptocurrency. It is what is called work of mining.

Those who carry it out through their computers can be so many people who dedicate themselves to it thanks to very powerful machines (there are small computers specifically dedicated to this), as private users who, Like the gold diggers of the North American gold rush, they hope to get some money to spend in online stores that accept cryptocurrency.

Mutual verification between mining machines ensures that currency is not counterfeited.

In order to save and use the cryptocurrencies, once these are generated, we must use a virtual wallet.

Any Internet user can have a virtual wallet without having to be a "miner" of cryptocurrencies.

In addition to mining them, we can always obtain cryptocurrencies by exchanging them for other currencies (whether they are also cryptographic or "conventional") in exchange houses that accept them.

The history of cryptocurrencies dates back to the end of the nineties of the last century, when they were defined at a theoretical level

However, the first practical and usable implementation is much more recent, having to wait almost a decade: Bitcoin, born in 2009.

Bitcoin has become not only the first cryptocurrency in history, but also the greatest exponent of cryptocurrencies and the best known among the general public.

A precedent for cryptocurrencies was Second Life's Linden Dollars, a subsequently evolved virtual reality environment into play. These "Linden Dollars" did not comply with all the precepts of cryptocurrencies, especially because they could hardly spent outside of the Second Life environment, although for a time it was a promising bet for the future in this regard.

In addition to Bitcoin, we can find other much less known cryptocurrencies, such as Dogecoin, Litecoin, Namecoin, or Peercoin.

The Bitcoin phenomenon

Without a doubt, the most famous and widespread cryptocurrency is Bitcoin, which was also the first. Not surprisingly, its name in English means “bit coin”.

Still unknown with safety to its Author, and although several people have claimed this authorship, none have been able / wanted to prove it reliably. Only a pseudonym (Satoshi Nakamoto) is what we have as a clue to the true identity of its author.

Bitcoin has become famous around the world for its opacity. The very definition of this cryptocurrency allows its use to be completely opaque to the eyes of others, thus protecting the identities of those who participate in the operations.

This has led to it being used by mafias and cybercriminals. For example, ransomware, malicious programs that hijack files from Username of the computers that infect, require a payment that, generally, must be made in Bitcoins.

However, the cryptocurrency is just that, a simple electronic currency. Its use already depends on what the Internet users, humans, give it.

On the Bitcoin website we can access the necessary software tools to work with Bitcoins, such as an electronic wallet. In the same store we can also see the exchange rate of Bitcoin with other "conventional" currencies.

In online stores like Amazon we can find hardware dedicated to the mining of this cryptocurrency.

Photos: iStock - TinaFields / D3Damon

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