After finding the solution for Hash function, a miner can build a block
and add it to the block chain. As a reward he gets a specific number
of Bitcoins. Bitcoins can be only created if a miner solves a crypto-
graphic puzzle. The difficulty of puzzle increases with the amount of
CPU power.
BASICS OF CRYPTOCURRENCY
• Block Chain: it’s the master ledger that records and store all the
transactions and activities, validation at any time. Identical copies
are stored in every nodes of peer network.
• Private Keys: All cryptocurrency users have a private key which
authenticates their identification and allow them to do their trans-
actions. This key consists of 78 digits long. If the user looses the
private key he can’t recover his accounts.
• Wallets: Every user has a wallet which confirms them as owners of
their tokens.This is very much similar to a bank account. Wallets
can be stored in hard drives, or in clouds.
FUTURE OF CRYPTOCURRENCY
Cryptocurrencies are gaining popularity day by day. Mostly, Bitcoins
dominate over other cryptocurrencies at present. On April 2017, mar-
ket capacity for cryptocurrencies was about $30Billons, but after few
months it exceeded $300Billions. What happened? This is because
the leading cryptocurrency Bitcoin dramatically increased its value up
to $2000 in May. There is a chance that this will come down to usual
values just as in stock market.
In 2017, cryptocurrencies are far from official recognition of state gov-
ernment as a preferred mode of currency. But the success of crypto-
currency depends on security, stability, transparency and transaction
cost. A big challenge with cryptocurrencies is to prevent unauthorized
copying. Hence, it uses two mechanisms; publishing every transaction
in public record and store them in a peer decentralized network, and
Bitcoin Mining Machine
Source - gizmodo.com
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University of Peradeniya Gauge Magazine