Simply explanation of Cryptocurrency and Blockchain

This is a simplified basic overview of Cryptocurrency and blockchain. It not intended to go into any great detail

Cryptocurrency is a digital or virtual currency where coin ownership and transactions are recorded and stored in a computerised ledger.
Cryptography is used to record those transactions and keep them secure.
There are many different types of cryptocurrency so I will start with the first decentralised one Bitcoin

In early 2009 an anonymous programmer or entity called Satoshi Nakamoto created a decentralised digital currency called Bitcoin.
They were not the first to create a digital currency this had been attempted several times back in the 1990’s but these were all based on a centralised system relying on a trusted 3rd party.

Bitcoin was different this was based on a decentralised peer to peer electronic cash system that didn’t require any company or trusted third party to manage it.
This was a big thing with no company or governing authority it couldn’t be stopped or controlled by any individual country or political system.

The big problem to solve on a decentralised network is how to ensure the ledger that records each transaction is genuine and someone doesn’t manage to double spend their bitcoin. Bitcoin overcomes this issue by using blockchain which is to simplify a digital list of transactions or a digital ledger. With Bitcoin this ledger stores all transactions that ever happened within the network and is publicly available to anyone.

For the network to work people need to use their computers to process and record transactions for everyone on the blockchain. In order to incentivise them they can be rewarded with bitcoin however to stop too many bitcoins being awarded they are also given incredibly difficult sums to work out. This process is called mining and is also known as proof or work.  

Bitcoin is a first-generation cryptocurrency and was designed as a decentralised form of money. When Bitcoin became more well know people realised that the underlying blockchain could be utilized for other purposes and not just money.

You then had Ethereum launched in July 2015 which is a second generation blockchain. Ethereum is similar to bitcoin in that they are both decentralised digital currencies that can be traded on, online exchanges stored in crypto wallets and utilise blockchain which can be mined using proof of work.
Ethereum though proposed to utilise the blockchain not just for maintaining their crypto token but also to run contracts and applications. They made improvement with the blockchain and reduced the transaction time needed to create a new block on the blockchain. A block is like a page in the ledger that records the latest transactions. Although Ethereum made several improvements it is still unable to scale to millions or billions of users.

As well as scalability which itself can be divided in to 3 parts, there are several other factors that need to be considered if a truly decentralised, scalable blockchain is to be accepted mainstream by companies and governments. 

This is where Cardano a third generation blockchain comes in to its own. Cardano has been designed from the ground up with great detail and consideration given to every aspect. They are the first to be founded on peer-reviewed research and developed through evidence-based methods. Read more about Cardano