What Are Digital Currencies Or Cryptocurrencies (Part One, Basics And Definitions)

The Beginning of The Concept of ​​Digital Currencies or Cryptocurrencies


In an era when the same old cash transactions were reduced to get replaced by electronic transactions and payments, the so-called digital currencies or encrypted assets Cryptocurrencies appeared, which despite the doubts that hovered around it in its beginnings – being virtual / electronic – but it received an increasing welcome and acceptance and demand that raised the costs of digital currencies to levels it absolutely was a regular that was impossible to imagine, and even made its thanks to international financial transactions, and it became the main target of curiosity and interest from everyone. during this article, we are going to shed light on that to demonstrate the concept of digital currencies and the way to house them.

The Concept of Cryptography

Before about to know digital currencies or cryptocurrencies, let’s study cryptography, which is attributed to the tactic of making and using those currencies.

Cryptography is originally the simplest way to safeguard information and data through the employment of codes, in order that only those that are targeted by the data can read them or know their hidden content and have the cipher key that allows them to process those codes to spot the first information.

The word cryptography will be translated by dividing it into crypt, which suggests hidden, and graphy, which implies writing, meaning that the term implies that it’s written content during a way that hides its content.

That is, hiding data from its usual and current context to a different context unknown to the general public in a very manner that preserves the confidentiality of its content, and it’s not a replacement process. The principle of encryption was employed in many diplomatic and military fields within the past and has many banking and data uses in our contemporary time, until we reached the digital currencies that depend in Built on the identical idea

The Difference Between Decryption and Cryptanalysis

Against encryption, comes decryption, which is that the return of the encrypted context to the image of the initial content in its usual and publicly readable context before the encryption process, and this is often done using the encryption key.

With the event of mathematics, computer and communication sciences, the method of encryption and decryption has become supported complex computational algorithms that are difficult to unravel, and whether or not the method of cracking the code or solving these algorithms – without decoding them within the way they were prepared from the start – is theoretically available, it’s impractical to try and do Through the known and currently existing information means, which is why the idea of its security and confidentiality has been proven up to now.

This is referred to as cryptanalysis and means the study of decoding cryptographic algorithms and their applications to get the content and source of data or encrypted assets without access to the key required to try and do so.

That is, we are able to shorten the difference between decryption and cryptanalysis to it decoding means returning the encrypted codes context to its American state using the cipher key prepared from the start to re-translate these codes to what they were, while cryptanalysis is an endeavor to decipher those codes By trial and error an out of this world number of times to reach a cryptographic algorithm solution to translate the encrypted symbols and know the first context without knowing the key

How Did The Concept of ​​Electronic Cash Transactions Begin?

Proceeding from the concept of ​​encryption and decoding, furthermore as coding analysis, the thought of ​​creating digital currencies was born Cryptocurrency, that is, the digital virtual currency that has been encrypted for secure and confidential transactions, because it is made and stored electronically without a supervisory authority or a financial organisation controlling it.

and it’s no physical entity like currencies Other regular or so-called mandatory cash issued by central banks like the Saudi riyal (SAR), the euro (EUR) or the US dollar (USD).

The idea of ​​a digital or electronic alternative to the same old cash transaction began within the late eighties approximately within the Netherlands in an exceedingly series of refueling stations or petrol stations on the highway during which many thefts occurred, and also the administration tried to seek out an answer to the present problem, that the administration hired a gaggle of programmers and developers to link money to cards Especially through which drivers wishing to cater to these stations can obtain fuel from them without the requirement to cater to currency in those stations.

and thus there’s no or a minimum of the cash are significantly reduced from the stations so as to cut back cases of theft, after which the thought of ​​the birth of smart money cards developed, Which wont to reflect the concept of ​​money saved in an electronic form encrypted within the card, while at the petrol station there’s a tool to decode that code, which is that the point of sales or what’s known today because the idea of ​​POS or point-of-sale. this can be the primary image of electronic money that has evolved to succeed in what it’s now.

The Beginning of The Concept of ​​Digital Currencies or Cryptocurrencies

To complement the concept of ​​electronic transactions, and almost at the identical time or a touch before, there was an inspiration wandering within the head of an American programmer named David Chaum, whose content revolves around financial privacy and an effort to simulate coins or paper into money that has the identical ability to deal in payments and move from hand To a hand safely and privately.

he created an algorithm formula through which money may be passed between the sender and receiver during a hidden, untracked way through a token currency he called at the time Chaum. 1998 during which he nevertheless laid a robust foundation for the concept of ​​algorithmic formulas for token cash transactions or cryptocurrencies.

Wait for the second part of the article, in which we review the advantages and disadvantages of cryptocurrencies. Follow us

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