{"id":232176,"date":"2021-01-12T12:36:03","date_gmt":"2021-01-12T19:36:03","guid":{"rendered":"https:\/\/4mperformance.com\/?p=232176"},"modified":"2022-04-26T08:26:23","modified_gmt":"2022-04-26T15:26:23","slug":"the-4mp-guide-to-cryptocurrencies-blockchains","status":"publish","type":"post","link":"https:\/\/4mperformance.com\/the-4mp-guide-to-cryptocurrencies-blockchains\/","title":{"rendered":"The 4MP Guide To Cryptocurrencies & Blockchains"},"content":{"rendered":"\n
\"Bitcoin
(Bitcoin, Ethereum, Litecoins)<\/figcaption><\/figure><\/div>\n\n\n

Following is 4M Performance’s<\/a> Guide through the world of cryptocurrency and blockchain technology. The Guide was composed as an easily understood yet conclusive reference source.<\/strong><\/em><\/p>\n

What is a Cryptocurrency?<\/strong><\/span><\/h3>\n

A digital (virtual) currency that is secured by cryptography – meaning it is impossible to counterfeit or double-spend. Many cryptocurrencies are based upon blockchain technology – a ledger built by a network of computers.<\/strong><\/h4>\n

Cryptocurrencies are NOT issued by any central authority or government making them theoretically immune to government interference or manipulation.<\/strong><\/h4>\n

Having said that, think of a cryptocurrency as an asset with a store of value (like a dollar) but unlike dollars, which are in public circulation, cryptos are distributed across a large number of computers. Cryptocurrencies are complicated. They use a ‘one-way hash function’ cryptography (a complex math formula) or, simply put, a one-way digital portal. When data is put through it the cryptography transforms the data into something incredibly unfamiliar from its original state. So unfamiliar that it is impossible to undo by working backwards.<\/h4>\n

Types of Cryptocurrency<\/strong><\/span><\/h4>\n

Bitcoin<\/strong>, was the first blockchain-based cryptocurrency and remains the most popular and most valuable. There are literally thousands of alternates to the Bitcoin. Launched in 2009 by an unknown creator known as ‘Satoshi Nakamoto’\u00a0 the current value of a Bitcoin was $40,033 (closing price as of 1\/7\/21) with a market value of $743 billion. Total value of all cryptocurrencies, over $1 trillion.<\/p>\n

Bitcoins are accepted as currency by many companies (Dell, Microsoft, PayPal to name several). Referred to as a BTC transaction the user provides the seller a signature (a line of security code encrypted with 16 distinct symbols). The transaction is secure because it occurs via a peer-to-peer computer network.<\/p>\n

Bitcoins are valued on a market price which is based on supply and demand. There are approx.18 million BTC in existence and their price can fluctuate widely. For example, in the last 12 months the price of a coin has risen 400%.<\/p>\n

Altcoins<\/strong><\/span><\/h4>\n

\u00a0<\/p>\n

Any coin that is not a Bitcoin is referred to as an ‘altcoin’.\u00a0 There are currently over 1,000 altcoins. It is easy to create a new coin – just copy and paste the Bitcoin code (available online), create a logo, and put it on a WordPress page. You’re done!<\/p>\n

\u00a0<\/p>\n

How It Works: Day-to-Day<\/strong><\/span><\/p>\n

\u00a0<\/p>\n

An Example:<\/p>\n

    \n
  1. Jim wants to send money to Mary<\/li>\n
  2. Jim puts together the transaction on his computer describing how much he wants to send<\/li>\n
  3. This transaction is called a ‘block’<\/li>\n
  4. This ‘block’ is sent all over the cryptocurrency network, then<\/li>\n
  5. thousands of computers validate the transaction by looking at all prior transactions that lead to Jim having enough currency to send.<\/li>\n
  6. The currency is sent to Mary<\/li>\n
  7. The Transaction is now in the ‘block’<\/li>\n
  8. To obtain the currency Mary uses her ‘private key’<\/li>\n
  9. Each new ‘block’ on this chain adds another layer of difficulty. Thus it becomes exceedingly more difficult to change or alter the validation of Jim’s transaction as more ‘blocks’ are added.\u00a0<\/li>\n<\/ol>\n

    \"Blockchain<\/p>\n

    \u00a0<\/p>\n

    Blockchain Technology<\/span><\/strong><\/h4>\n

    The main appeal of Bitcoins and other ‘altcoins’\u00a0 is they function via blockchain technology, which is used to keep an online ledger of all of the Bitcoin transactions that have ever been conducted. This provides a data structure for the ledger that is quite secure and is shared and agreed upon by the entire network of computers maintaining a copy of the ledger. Every new ‘block’ in the chain must be verified by each computer before being confirmed making it almost impossible to forge transaction histories.<\/p>\n

    Blockchains can be used in various other applications to solve security issues. For example, online voting, crowdfunding, and payment processing. Funds can be directly transferred between two parties without the need for a third party, like a bank or credit card company.\u00a0 Each crypto ‘user’ has a ‘wallet’ or account address (a public key) while a private key known only to the owner is used to sign transactions.<\/em><\/p>\n

    Coin Mining<\/strong><\/span><\/h4>\n

    Bitcoin mining is the process of creating new bitcoins by solving a computational puzzle. This process is performed by high-powered supercomputers that solve complex math problems. These problems are so complex that they cannot be solved by hand and tax the most powerful computers.<\/p>\n

    What is the result of mining:<\/strong><\/span><\/h4>\n