From time-to-time we feature cryptocurrency stories here in Thethreatreport. Hence, it is really necessary for us to explain what it is, in an easier to understand language for the newbies. This article is highly recommended to read before getting deeper with the cryptocurrency cybersecurity news that we feature in this website:
The legal currency used by the country is different from the Euro for European Union member states and the Yuan in mainland China. For foreigners, they need to exchange the currency of their destination country, but the exchange costs a fee and potential loss of value is real, as money changers also collect service fees. However, cryptocurrency has no borders and can be used as it is without exchange in any country. Credit cards are also accepted worldwide, but they cost about 3% to 5% and are more expensive than the former.
Once specific advantage of cryptocurrency is trading 24/7/365, as long as the crypto exchange used is up. People can easily transfer virtual currency anytime, regardless of weekdays, holidays, or time. If you want to transfer cash overseas, you must use a bank or post office system and can not send money outside business hours. However, when transferring cryptocurrency, the transfer will be completed simply by sending it to the designated cryptocurrency address (digital wallet) without going through a bank or a financial institution.
Cryptocurrency address is an identification number that indicates the existence of cryptocurrency, the counterpart of it in our current banking system is the bank account number. Cryptocurrency addresses can be easily created using virtual currency exchanges and sales offices that handle cryptocurrency wallets. In addition, the remittance fee is also cheap. Cryptocurrency, like Foreign Exchange, can use a margin to make trading on a small amount of money, enabling trading of a large amount of money. Margin trading is capable of trading many times the amount of deposited deposits, and can also sell short on currencies that you do not have. Note that some exchanges only deal with cash transactions, while others have limited types of currency available for margin transactions.
Although the future of cryptocurrency may be subject to short sales, it is expected that many institutional investors will enter the market as they are listed on the world’s leading exchanges. In the future, if the system of cryptocurrency market is developed, the market size will expand by gaining the trust of investors as a financial product following stocks and exchange.
Blockchain is the heart of all cryptocurrencies, it is simply a technique of “a ledger” that records time series data such as transactions. It is easy to understand if you imagine the bank passbook, etc., but it is a technology suitable for recording time-series transaction history, such as how many dollars is deposited from where and how many dollars has been remitted to where. In the past, there was an “administrator” who managed transactions and movements of goods, and the administrator also managed the ledger. If the bank account mentioned in the previous example, the bank manages the ledger, and it is common for the company that issues the points to manage the ledger as a manager, for the points that can be obtained when buying a product.
However, in the blockchain, the ledger is not managed by the administrator with special authority, but it is a mechanism that all participants have in a distributed manner. For this reason, blockchains are called “distributed ledger technology.” In the conventional ledger, even if information on a particular transaction is altered or another fictitious transaction is inserted during a past transaction, it basically does not affect the information on other transactions. Therefore, even if the transaction data is checked, tampering can not be detected, so a mechanism for acquiring other security software, data update history, etc. was required.
On the other hand, in the block chain, tampering prevention measures are embedded in the way of holding the data of the ledger itself so that tampering can be recognized in the block chain system. It is easy to understand that in the blockchain the ledger is distributed and shared by all the participants. The falsification is not established by falsification of only the ledger in one server or PC. If you do not change all of the ledger, you will discover inconsistencies somewhere. The other is a distinctive mechanism for blockchains. Blockchain participants create a new block to properly write the transaction to the ledger, but to create a block you need to have three pieces of data. The first is the data of the new transaction that has not yet been written to the block, the second is the hash of the previous block, and the third is the value of “nonce (* 5)”. It may be said that the existence of this nonce makes the falsification extremely difficult. Think of a nonce as a value to adjust the “new block” hash value.
With these mechanisms, the blockchain can use a ledger safely even if there is no administrator with special privileges or special security measures. Even if the ledger of a participant who does not have any security measures is tampered with, it is said that the tamper resistance is superior to that of the conventional ledger because tampering is easily found from the mechanism of the block chain itself. In addition, since it takes time for the regular ledger to synchronize in the whole block chain, new blocks are simultaneously created in the block chain, or they are chained to produce the next block and form a branch of the chain.