hello everyone welcome to channel deep talks.
Myself is naman jangid and let's have adiscussion of cryptocurrency or vitual currency.
I thinkyou may heard of bitcoin so bitcoin is a also a form of cryptocurrency and let me tell youthat there are more than 900 cryptocurrency available as of 2016 so my main concern topicis, are these currencies becoming global currencies as we see in past that with change of time,there is a change in the method of dealing, method of trade and with the change of methodof trade,we change our form of currencies, so let see that what is this virtual currenciesbut for explaining that virtual currency, i would like to recall our former currenciesthat how we use to deal or trade in our former time, so start from very beginning and thenwe will come to the virtual currency.
so we start from the 9000 BC, let say in 9000 BCwhat we use to do, let say that this is the 1 person and this is the 2nd person so thisperson is having cattle and this person is having grains so in that time we used dailythings as a currency, let see how , so let say that this 1st person was in need of grainsand this 2nd person was in need of cattle, so what they would do, they would exchangethe things but problem was that they should meet each other requirement only then theywill exchange the things, i mean to say is if 1st person was not in need of grain andthen how would he gave cattle to him,so they should meet each other requirement that onlythey can exchange the things or we can say that they can use the daily thing as a currency.
Sothis was about 9000 BC but we come to the 4000 BC now then what we started using, westarted using metal coins as a curreny, so why we started using metal coin as a currency,first of all that these metal coins holds some value and they can easy to carry anywherein the world and they were used as a global currency also so these metal coins were usedas a global currency or we can say as a form of currency in that time in 4000 BC and howis this developed from this type of thing like in 9000 BC,so we can see here that cattlealso is having some value but after some time cattle will be died and after some time grainswill also be consumed, actually this thing having the value but they can not be usedlast long but these metal coins can be used last long that is why metal coins are usedas a type of currency in that time.
Now if see 1000 year back, in 1000 year back we usedpaper as a form of currency.
Let see how, actually in that time people who was having gold sothey had a fear that if thier gold have been stolen than what would they do , so they getthier gold or we can say they deposited thier gold to the goldsmith and in exchange of thatgold, goldsmith used to give them a piece of paper,actually that was a proof that youpeople deposited gold to goldsmith, so in order to make the trade easy people startedexchanging that proof or we can say that piece of paper instead of gold because exchanginggold was much difficult than exchanging than piece of paper and that piece of paper beocmea form of currency in that time.
So we can say that paper was used as a form of currencybut we can say that gold is having value in that paper that is why paper was used as aform of currency.
now we come to present situation, what is the present situation, in presentsituation we are using fiat money, now what is mean by fiat money, actually real valueof fiat money is zero because it is just a piece of paper but this is the promise ofthe government to the bearer that yes i promise you to give that much of money to the bearerso this is the promise which is government giving to the bearer as you can see on the100 rupee note you can see that i promise the bearer to pay 100 rupees.
so this is calledfiat money but what is the problem with that fiat money that this fiat money can be usedonly in the domestic country, if we want to send this money to other country then we haveto go through some intermediate or some third party that will charge to us than they willsend the money to the second person so this is the present situation, now this problemis overcome by you can say our virtual currency.
so friends as we discussed that with the changeof time, we changed method of trading and we opted various form of currency so we aregoing to discuss about cryptocurrency or virtual currency now.
so i already told you that thereare more than 900 cryptocurrency in the world by 2016 but i will take one and i will takethe example of bitcoin because bicoin is becoming very popular these days so i will take theexample of bitcoin only, so let me tell you first of all that we can not feel this currencyas we do it now, as we feel our 100 rupee note or any note, we can see ,feel it or wecan hold in our hand but this is not in the bitcoin or any cryptocurrency because thisis the computer code and each transaction of the computer code is adding up a new digitalsignature and whole these account are settled in the block chain, which is looked afterin the block chain, so i will explain now what is the block chain and you may heardof miner also so i will cover that topic also so let say that what is this block chain andby understanding this block chain you will get clear whole concept of the bitcoin orthe virtual currency.
Consider there is a network of 4 people.
A B C D so if we go through thecurrent situation, now let say that this A lives in one country and C lives in the othercountry and if A wants to move some money to C then he has to go through some intermediatemoney exchange and that money exchange will charge him some money to move some amountfrom A to C.
so let say A wants to move 100$ then as a charge this money exchange willcharge 2$ and C will get only 98$ so this is the current situation and this processwill take 2-3 days, so to overcome this problem this block chain or you can say virtual currencyis needed, so let examine the process of the block chain.
so this is the network of 4 peopleand let say A is having 10$ in his account so there will be data here that A is having10$, now A wants to move some money to B , let say A moves some money to B i.
E 5$ then therewill be addition of the link here, addition of the transaction that A moved B 5$ ,nowrepeating the same process B wants to send some money to C then there will be additionof the transaction and it will be this calls that B moved 3$ to C , so this will be automaticallyadd up here and following the same procedure if we say that C send 1$ to D then it willautomatically be added up here that C moved D 1$, so this is the block chain or we cansay open ledger so you can say here that everybody can see this transaction,everybody has theright to see this transaction ,so if we say that if A wants to move D 10$ then everyonecan notice that A is not having 10 $, A is not having that much amount of money so thisis the invalidate transaction and this transaction will not be added up here so this is the benefitof this transactions, this is the benefit of the open ledger that everyone can see thesetransactions so that any mishappening will not be there,so this is the open ledger, nowcome to the distributed ledger, let me tell you that these whole transactions are mangedby the centralized system,so in order to get rid of that centralized system, distributedsystem is introduced, what is the distributed system, these whole transactions can be distributedanyone of the nodes, anyone can have this distributed transactions and can see the wholetransactions, so let say C and A is having that distributed transactions, so what isthe benefit of this distributed transactions that we get rid of the centralized system, where was centralized managing that transactions now this will be managed by the A and C, becausethey can see the whole transactions , they have the distributed of the transactions ofall network and how they will managed, they will work as miner, so basically what is thework of the miner, so let say, now D wants to send 2$, so now what is the work of miner,why is the need of miner, he need to make sure that everyone has a same copy of a ledgerbecause they might be cheating so they have to make sure that everyone has a copy of thatledger that why miner are introduced so what will miner do, miner are going to be competeamong themselves , let say C and A are the miners, so miner are going to compete amongthemselves and who is going to be first will get financial reward and how will they getfinancial reward, what is the work, we will understand the work first, first thing minerwill validate whether this transaction is valid or not, this is valid because we cansee B is left with 2$ and B wants to move 2$ to B, so this transaction is validatednow second thing they will find a special key that will enable to take the previoustransaction to the new transactions and to this previous transaction lock into this newtransactions,means that previous transaction was this much so they will enable the key,miners will enable key that will lock the previous transaction to the new transactionso this will be lock to this transaction, ok , they will find special key and for thishe has to need to invest computation power and they can do this with the help of computationpower and let me tell you who will first solve this will get financial award, let say C doesit first, now A will find another transaction, so C will get award ,so in this way we cansynchronized whole transactions,whole network and we can see that all thing are going rightor wrong so this was about the work of the blockchain and this how virtual currency work,so i think you get all this working of the blockchain and this was all about the virtualcurrency, so i think you liked the video and please if you liked the video don't forgetto subscribe the channel.
THANK YOU, HAVE A NICE DAY, TAKE CARE , JAI HIND.