Cryptocurrency is a “new kind of money”, similar to the Canadian or U.S. dollar, only it is digitalized instead of printed. There are no physical coins, bills, or cheques. Because it is a strictly digital currency it goes through a decentralized system. This is unlike all other currencies which are centralized, they must go through banks and authorities, and the prints are controlled.
Cryptocurrency originally started with Bitcoin. Bitcoin was made by someone under the pseudonym Satoshi Nakamoto, and the goal was not to create a new currency but to create a decentralized digitalized cash system. However, because of their successful ideas, others caught on and began creating other systems. For the curious, the original document Satoshi Nakamoto released on their ideas and reasoning is posted on the Bitcoin website: Bitcoin: A Peer-to-Peer Electronic Cash System. Essentially, it is a decentralized system verified by blockchain.
To have a decentralized system is to eliminate the “middle-man,” meaning each individual or party must make their own independent actions.
For example, if two young kids didn’t get along, they might need a teacher in the room to help control their actions. This is a centralized system. However, if they were able to act independently and behave without supervision of a teacher, it would be a decentralized system. In an economical sense, cryptocurrency is taking the banks and federal reserves out of transactions and exchanges. This is particularly valuable on a global scale. First of all, this system cannot be abused by authorities. It takes the regulation power away from all forms of authority and gives it to the people. Also, since cryptocurrency, and bitcoin in particular, are a part of a fixed market cap system, hyperinflation cannot occur.
The currency can’t lose value, as long as people believe it has value.
If there is no centralized system, how is it legal?
Blockchain is a system that links computers in a peer-to-peer network to verify and record of all the transactions that take place on bitcoin or other cryptocurrencies.
Blockchain is the regulator. Blockchain is a system that links computers in a peer-to-peer network to verify and record of all the transactions that take place on bitcoin or other cryptocurrencies. This means that everyone can witness and have a record of each transaction the currency has made. This allows cryptocurrency to be free of duplication of transactions and counterfeit. With only a defined number of coins available, a track record of each in the system and public access to these records, verification is possible. However, the verification process does take time. It involves time-stamps and proof-of work. There are certain parameters that each transaction must fit into, and these are called the “block”. When these functional transactions align you get the blockchain.
Another hurdle with a decentralized system is that there is no one to distribute the initial coins. This is where “crypto-mining” comes in. Crypto-mining is the act of determining the block and starting the coin in transaction. This is done by running a series of calculations and logarithms to find the block through servers. Servers require time, space and energy in order to obtain coins. Most servers get their energy from fossil fuels such as coal. However, in Canal Flats hydroelectric energy is used to power these servers in the data centers. PodTech has created the MegaPods which are specialized, highly efficient, and cutting-edge data centers to host these servers. Using green energy and providing jobs to rural BC are both priorities of the company and the Columbia Lake Technology Center, of which PodTech is a partner. They have data centers specifically designed for crypto mining that they can build and operate on site. Whether you’re investing in cryptocurrency or crypto mining, come check out the Columbia Lake Tech Center in Canal Flats!
Crypto-mining is the act of determining the block and starting the coin in transaction.