What is Digital Currency | how Digital Currency Work | Blockchain, Cryptocurrency, Bitcoin

What is Digital Currency | How they work

Today we're going to learn introduction of digital Currency and Their work Before we start, we'll study the termynology. There are three terminology.

First: Blockchain, 

Second: Cryptocurrency or digital currency

Third: Bitcoin

 1. what is Blockchain | how Blockchain Work:

You can learn Blockchain from many angles You can learn from the complex "technical" angle. and from the simple "human" language angle. Even though it is still sometime hard to understand, I will try to keep the explanation as simple as possible Blockchain is technology behind Bitcoin. Blockchain is actually a big book or LEDGER and it's DISTRIBUTED, meaning there is no entity can control it. and it's distributed inside its own (blockchain) network this network will record every transactions between parties, without central entity (or intermediaries). There is no entity who control this network to verify and proceed the transactions.

I'll give you example, "we have normal transaction. We have two parties, Adam and Eve. Adam wants to transfer to Eve in USD (United State Dollar) Adam will contact his issuing bank, 

e.g Bank A and transfer the fund to Bank B In Bank, they have record or so called Ledger of Adam.

e.g How much money Adam have, and every detail transaction Adam made are kept in this ledger. This ledger is not for public, so this ledger is for Adam only. (private ledger) After Bank A do the validation, fund will be transferred to Adam. Which will be received by Bank B, Bank B also do the verification. This is an example of normal (everyday) transaction.

 This is very much different from doing transaction in blockchain I'll explain about it, still using the previous example, Adam & Eve. Here's Adam, we'll see from the blockchain perspective and this is Eve. Adam wants to transfer to Eve in BTC. When he do this, the ledgers are located in the blockchain network. The network consist of connected computers (servers) e.g computer A, B, C They are all connected so called bitcoin / blockchain network. Each of those computers, has their own ledger (A,B,C each has its own ledger). These ledgers are not centralised the are distributed and public. so everybody can see whats inside the ledger. The transaction from Adam then will be validated the network After verified, BTC will be transferred from Adam to Eve.

Therefore, there is no centralized entity which will validate the transaction. The blockchain network itself who will do blockchain validation. That's how blockchain works. 

What is Cryptocurrency | How Cryptocurrency work:

Cryptocurrency is a digital currency which can store value. There are many cryptocurrencies, e.g Bitcoin, Ethereum, RippleBitcoinCash These are cryptos. which we often heard about So Bitcoin is not the only one Bitcoin, it's a cryptocurrency which first (pioneer), developed using blockchain technology.

BTC has the largest transaction value, in 2018 it reached USD 1.8 trillion. I'll give you illustration, for example There are two parties,  A and B, they want to do the transaction. What they do is that, they'll barter goods For example, Cow will be bartered with Gold. So this is Gold Metal is the currency and the technology is fabrication. So the gold is minted to become coin, then we can use this coin for barter a little bit further ahead, we change the currency to note the trading between goods are replaced using note, we don't use metal / gold anymore IDR is not the only one,

we use currency like USD, GBP, or JPY It's note. We use printing technology. So the note is printed on paper That's why when oversupply it can cause inflation to raise. 

Well that's another topics Now, or in the near future, Bitcoin, similar to the previous example. So the instrument is BTC, and type of currency we call crypto currency, and the technology behind it is blockchain.

 So in this slide, i want to give comparison between those three ( note and gold) So. What exactly is Bitcoin? 
Characteristics of  Bitcoin is like gold, it's valuable limited, e.g if you mine gold, the supply is limited and the gold later on will deplete. Gold has strong defend against inflation, and very much different from note Note is  printed, by the government (unlimited) BTC can also be divided just like gold. Secondly, BTC can function for trading We now can purchase goods in America using Bitcoin. It's faster, easier, and cheaper. 

What is Digital Currency | how Digital Currency Work | Blockchain, Cryptocurrency, Bitcoin

3. What is Bitcoin | How Bitcoin Work:

Bitcoin is similar like Internet No party / entity can control it, and it's open for everyone. so, this is the complete definition. Bitcoin is part of digital currency or crypto currency Bitcoin is not controlled by bank, not backed up by any government from any countries. But it come from the decentralized computer network who are using certain algorithm. This algorithm is so called cryptography. They use certain mathematical problem, and thus the currency is called cryptocurrency.

which use blockchain technology Bitcoin is currently the oldest and the largest cryptocurrency. Now, why we need to understand Bitcoin ?
Bitcoin is new initiative which is very innovative and disruptive. Bitcoin is still in very early stage It's like email first time introduced to the world. This email disrupted the mailing industry letter delivery from one point to another. This disruption will has impact on many industries and its ecosystem. We now still cannot determine what will happen to Bitcoin in the future. Bitcoin is still evolving and changing. But you need to know, so that you may prepare yourself. Don't get over whelmed, or leave behind, or not know nothing about this new technology.

 So dont leave behind. You'll know how to take your standing in the near future. Lastly, In this bitcoin hype, there is an investment opportunity, where we can make profit or beneficiary for us. For your info, bitcoin can be used for investment.