Welcome to PONDERJAUNT.
This is a digital-dojo dedicated to the direction of your
digression in decentralized digital currencies...
This site is a space for the discussion and Socratic education of basic crypto concepts and how to apply them in the modern economy. Whether you’re actively trading or just trying to learn more about the market; your education, background, network, interests, and questions are valuable to this forum.
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What is Cryptocurrency?
Today, let's learn about the future of the global economy, shall we? Bitcoin and Ethereum are just two of thousands of cryptocurrencies (“coins”) vying for space within a new network of decentralized computational values. So, what the does that mean?
It means that the old way of bartering money for goods and services is dead. It's not dying; it's already dead. The current economic model is to base purchases or transfers on electronic ledgers that are held and calculated by a central system or group of systems within a bank's ecosystem.
When you have multiple banks within an ecosystem, the transaction records that must be sent between them increase in size and volume to the point where calculations require advanced computing to handle the load securely and efficiently. Thus, digital banking becomes a necessity.
Digital banking takes all traditional banking activities and programs that are available to customers when physically inside of a bank branch, and moves them online. This includes deposits, withdrawals, and transfers of money, as well as checking/saving account management.
In the modern era, banks must use large internal servers and systems to handle the computational load. Learn more about it here. These networks are very expensive and difficult to maintain, and banks are always looking for newer, more efficient technologies to help money flow faster.
With typical day-to-day transactions, normal banking data management systems easily handle it, but what happens when economies change, and volumes of exchange increase exponentially? How can the current banking model hope to keep up when data management costs are already maxing the rest of most industries.
Ultimately, banks will account for most of the spending in digital information for the foreseeable future, yet as we’ve established, traditional banking is already dead. These projections are still relying on promises of increased expenses for management of asset growth in the future. Overvaluations such as these played a large factor in what led the 2008 financial crash, which crippled growth for years.
But what is dead can never die.
Like a kraken of the deeps, centralized banks have a death grip on the assets which allow them to manage capital at astronomical values. So, what is the problem? Well, centralized banks don’t always act in the best interest of the consumer. What if there was a way for people to reclaim their assets? What if we could cheaply and efficiently manage our own digital financing in a secure network regulated by its own principles of design?
Enter cryptocurrency: a technology that was spawned on the back of the internet.
While the banks have managed to keep up with the transition thus far, the future is utterly unreachable with banking’s current biggest limitations, outlined below:
-Increased volume = increased expenses to manage data
-Traditional economic systems require physical "handshakes"
-Unchecked valuation leads to crashes
Cryptocurrencies are based on blockchain technology instead of the pyramid structure of the traditional banking institutions. The transaction data is providing the backbone to something much more powerful, and that limitless growth is not capped like a traditional financial model which accumulates wealth at the top. The block chain is best described like this:
Imagine you have a train, each car of that train holds not passengers or cargo but the balances and transaction data of an entire economic system. These cars are secured not with iron interlocks, but with encrypted algorithms that essentially obscure all the data within the car. These algorithms take processing power to crack and that's where nodes come into play. Nodes are machines that "mine" cryptocurrencies.
When I say "mine,” I mean the process that allocates processing power from CPUs/GPUs to crack the algorithm that is protecting the value of the data. While this might sound malicious, imagine this more as a truck weighing station. Each car has specific data, holding specific values of transactions. They are dynamic, but the entire system is tracked because every-time a node verifies the encrypted value of the car is must check it with other nodes to confirm that value is true. If weight were to leave the truck between weigh-ins at a station the whole system would know that something was up.
This Crypto 101 is meant to provide a very brief overview and introduction to an extremely complex technology. There is much more to come, and as we dive deeper, be sure to sign up for updates from our website.
Planned additions coming soon:
-Intro to trading
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