Cryptocurrencies are entirely virtual (no physical coins)
Users of cryptocurrency have keys that prove their ownership of coins on network
Keys are often stored in digital wallets
Cryptocurrencies use a distributed peer-to-peer system
New currency is generated on the system through the process of mining
Its is an computationally expensive task that references the recent transactions
Transactions on the blockchain are immutable and cannot be reversed
Cryptocurrency systems are composed of 4 main components:
- A decentralized peer-to-peer network
- A public transactional journal (Blockchain)
- Rules for independent transaction verification and currency issuance
- Mechanism on reaching global consensus on the valid blockchain
Table of Content
Smart Contracts
Self-executing contracts where the terms of agreement are written directly as code
Can automatically perform actions when certain conditions are met
Once a smart contract is deployed, it cannot be altered
This makes the agreement tamper-proof and trustworthy