Cryptocurrency is a digital or virtual currency that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
What is Bitcoin?
Bitcoin is a cryptocurrency and a payment system, first proposed by an anonymous person or group of people under the name Satoshi Nakamoto in 2008. Bitcoin is the most well-known and largest cryptocurrency by market capitalization.
How does Bitcoin work?
Bitcoin uses a public ledger called a blockchain to record transactions. A new block is added to the blockchain every 10 minutes. Bitcoin nodes use the block header to build a Merkle tree with all the transactions in the block. Nodes verify the validity of transactions by checking the signatures against the public key of the sender. Bitcoin nodes also use the block header to build a second Merkle tree with the most recent transaction hash as the root. Nodes use the second tree to verify the existence of a transaction.
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. Ethereum is a Turing complete platform that can run any program, regardless of the programming language.
What is a smart contract?
A smart contract is a computer program that can automatically execute the terms of a contract. Smart contracts are executed by a blockchain, which is a distributed public ledger. Ethereum is the most popular platform for running smart contracts.
What is a blockchain?
A blockchain is a distributed public ledger. A new block is added to the blockchain every 10 minutes. Bitcoin nodes use the block header to build a Merkle tree with all the transactions in the block. Nodes verify the validity of transactions by checking the signatures against the public key of the sender. Bitcoin nodes also use the block header to build a second Merkle tree with the most recent transaction hash as the root. Nodes use the second tree to verify the existence of a transaction. Ethereum nodes use the block header to build a Merkle tree with all the transactions in the block and the most recent state of the contract. Nodes verify the validity of transactions by checking the signatures against the public key of the sender. Ethereum nodes also use the block header to build a second Merkle tree with the most recent transaction hash as the root. Nodes use the second tree to verify the existence of a transaction.
0 Comments