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Cryptocurrency

Cryptocurrency is taking the attention of many entrepreneurs, including bitcoin, dogecoin, and much more. Meanwhile, another word is taking the social media world into a storm: crypto art. Well then, is crypto art the same as cryptocurrency? To an extent, yes, crypto art works in the same way as cryptocurrency. However, it is not exactly a currency like real money or bitcoins.


The word crypto is binary data designed to work as a medium of exchange. Individual coin ownership records are stored in a ledger existing in a form of a computerized database, using strong cryptography. This is done to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. As we have discussed in previous articles, cryptocurrency ​is any system of electronic money, used for buying and selling online and without the need for a central bank. Whereas, crypto art is a way of making digital art unique, and therefore – according to some – valuable. Normally, digital art is very easy to replicate due to the very nature of digital information. So crypto art is a way of making digital files one-of-a-kind. A very popular example of crypto art that uses NFTs is the meme, Nyan Cat gif, which is worth $600,000.



Image Source: https://tenor.com/search/nyan-cat-gifs


Well, how does crypto art work?

The one amazing thing about crypto art and why it’s ‘one-of-a-kind’ is the fact that it uses NFTs or a non-fungible-token. This basically means that a unique ID is assigned to the art. The ID is checked against a database and is shared across a network of computers known as ‘blockchains’.


Blockchains are a type of database (a computer system that stores information). The advantage of it is that users can simultaneously access the information at the same time. Other than this, it is efficient to use for large data sets. A blockchain holds sets of information in blocks and ‘chains’ them together. Thus, becoming blockchain. New information would be added into a new block and then connected to the previous chain. It acts like a linked list! The steps connecting cryptocurrency and blockchain are:

  • A new transaction gets entered

  • The transaction is then transmitted to a network of peer-to-peer computers scattered across the world

  • The network of computers then solve equations to confirm the validity of the transaction

  • Once confirmed to be legitimate transactions, they are clustered together into blocks

  • These blocks are chained together creating a long history of all transactions that are permanent. Thus, completing the transaction.

Sources

https://en.wikipedia.org/wiki/Cryptocurrency


Written by Dena Von der Luehe

Edited by Amanda Y