In recent times, it is difficult to miss the phenomenon of cryptocurrency and especially Bitcoin, the most famous of them. The craze is indeed unprecedented for this currency whose emergence date from 2009. From Warren Buffet to Nabila Benattia, everyone has more or less his opinion on this investment, sometimes acclaimed, sometimes demonized. But what does this cryptocurrency phenomenon really mean? What are the different currencies in circulation? What are they for ? We decrypt for you this phenomenon in order to see more clearly on the issues ahead.
Beginning of the story
Satoshi Nakamoto, that name may not tell you anything. In reality, this is a pseudonym chosen by the person (or the group of people?) Who laid, in 2008, the foundations of the future Bitcoin (Bitcoin Private Claim fork). By publishing online a PDF document ( French version ) of less than ten pages that explains the operation of Bitcoin, Satoshi Nakamoto has created a real revolution in the world of money. To summarize his innovation in a simplified way, it is possible to say that Satoshi Nakamoto wanted to invent a new way of exchanging money by holding a kind of digital ledger called the blockchain, whose function is to trace all the exchanges between holders of Bitcoin. A code, named hash , allows to verify in a simple way that no transaction has been added or modified by a user.
The initial objective
What was the original goal of Satoshi Nakamoto? By creating this virtual currency, the inventor of bitcoin wanted to think of a decentralized currency that opposes in all respects current currencies centralized by major banks. The purpose of cryptocurrencies is to reduce the power allocated to an intermediary whose role is to validate a transaction. Thus, the whole Bitcoin works according to the principle of Peer-to-Peer ( as when downloading torrents for example ) that allows a file exchange directly between personal computers. By running his computer on a software called Bitcoin Core, it is possible to add your computer to the network and ensure the integrity of Bitcoin by constantly checking the history with hash functions. This is the role of miners , who, like the gold rush, try to find new combinations of numbers to add blocks to the blockchain and ensure the viability of information. The reward for these minors is a sum of Bitcoins based on the encrypted transaction.
Thanks to this distribution of control in the hands of all miners in the network, cryptocurrency (Bitcoin Private Claim fork) makes it possible to avoid a situation that confers too much power on the intermediary (the banking establishment). The advantage is therefore multiple:
Increase the security of the entire system through permanent control of transactions
Reduce transaction fees, especially on international transfers
Secure money creation processes by a protocol
What are the different cryptocurrencies that exist today?
Today, several cryptocurrencies exist on the market. Some are more developed than others. If Bitcoin is the most famous, Ethereum is also a currency that has developed thanks to a very powerful technology. It is also possible to quote currencies such as Litecoin, improved version of Bitcoin, Monero which is a currency based on confidentiality or the Ripple which is a cryptocurrency that manages to integrate into the banking system by allowing servers private to validate transactions. This currency, which has achieved a performance of 36018% in 2017, aims to make banking faster, easier and less expensive.
Are exchanges risky?
In a classic currency, the bank acts as an intermediary and secures a seller on the actual possession of money from the buyer. In the context of cryptocurrencies, the latter operate according to a majority community mode and, during a transaction, it is necessary at least that more than 50% of the computers in the network validate the source code. Thus, to be able to falsify financial operations, it would then be necessary to control more than 50% of the encryption power of the network, which is very complicated and which, if necessary, would be known by the community and would cause the disappearance of the cryptocurrency concerned. .
The power of security keys
To validate transactions, a signature via the system of asymmetric cryptography allows everyone to be able to effectively assure the community that he is the author of the transaction. Thanks to this double verification system (public and private), falsification of transactions is almost impossible. Each cryptocurrency holder therefore has public or private codes or keys. The private keys must imperatively be preserved and not disclosed because they allow to them alone, the different transfers of money.