Crypto currency

Crypto currency is a digital asset, accounting for which is decentralized. The operation of these systems takes place using a distributed computer network. Thus the information on transactions can not be ciphered and to be accessible in an open kind. Cryptography is used to ensure that the chain of transaction database units remains unchanged. The term was entrenched due to the article o Bitcoin «Crypto currency», published in 2011 in the magazine Forbes. The very same author Bitcoin, like many others, used the term «electronic cash» (Electronic cash). The method of issuing crypto currency can be mining, forging or IPO.

Feature of Crypto-currency

The key feature of the crypto currency is the absence of any internal or external administrator. Therefore, banks, tax, judicial and other public or private bodies can not influence the transactions of any participants in the payment system. All this ensures the irreversibility of transactions — no one can cancel, block, challenge or force a transaction without access to the owner’s private key. However, the participants of a transaction may voluntarily temporarily block their funds as collateral or establish that the consent of all (or arbitrary additional) parties is required to complete / cancel the transaction.

To solve the task of the Byzantine generals, even when most of the nodes are intruders, the blocking technology that first appeared in Bitcoin is used. To store data, transactions are combined into blocks, from which a chain of blocks is formed. Continuity of the chain is ensured by including the previous block in the current block of the hash. Thus, it is not possible to change the block without changing hashes in all subsequent blocks, and only the longest chain is considered valid, all hashes in which meet certain requirements. In different crypto-currencies, Proof-of-work, Proof-of-stake or a combination thereof are used to verify the blocks.

As a rule, in the crypto-currencies, developers initially make the upper limit of the total volume of emissions. However, some crypto-currencies, such as PPCoin, Novacoin, Sifcoin and others, do not have a fixed upper limit for the total volume of emissions, and both emissions and issues are possible (by mandatory destruction of a small fixed amount in each transaction).

Most crypto-currencies are used «pseudonym» — all transactions between all addresses (purses) are public, but there is no link to the address of a particular person. However, the identity of the owner can be established if the necessary additional information becomes known. The concept Zerocoin outlined the possibility of replacing the pseudonym for anonymity.

The article is in the translation stage, and is still being updated. I’m sorry for the mistakes. Good reading.