DEV Community

Cover image for How Cryptocurrency Works Explained Visually

How Cryptocurrency Works Explained Visually

Narottam04 on January 29, 2022

In 2008, when Lehman Brothers Holdings Inc. filed for bankruptcy, it shook people's faith in banks so much that a new class of assets appeared with...
Collapse
 
johnkazer profile image
John Kazer

You imply that a Blockchain and cryptocurrency are more secure than data held by a bank. But evidence suggests that hacks of crypto systems are frequent and NFT markets full of fraud.
I can accept that in principle security is better but practice currently suggests a lot of poor coding practice and lack of user protections.

Collapse
 
gklijs profile image
Gerard Klijs • Edited

If so, banks are less secure because?
At least banks have a lot of regulation, and for example here in the Netherlands, if a bank fails your money is still to a degree guaranteed by the government.
And yes they can be hacked, but we can easily discount that by the same reason right? It's not the bank system as a whole, it's just a single bank that made a mistake?

Thread Thread
 
yournewempire profile image
Archie Smyth

Hello. I totally agree with your point about your money being guaranteed to a degree. It would be tragic if a bank did not resolve something like that, and this rarely happens from my perspective. Traditional banks are not necessarily absolutely less secure and I totally understand your point. Security is not crypto's best talking point in my opinion. As Fran says, you must accept the possibility of poor smart contract code before slamming the protocol that the developer has written the code on. Even the smart contracts that inherit the secure ERC-20 token standards, may have some custom functionality which handles the tokens that is insecure. Sending and receiving the native Ether token on the protocol layer is working securely.

The ability for people from developing countries to have the same access is a huge positive that fiat currency cannot offer.

Collapse
 
maceypratt profile image
MaceyPratt • Edited

Hey everyone! I'm bumping this old thread to add my thoughts. It's incredible to think of how much growth and innovation has come in the world of cryptocurrency as a result of the 2008 financial crisis. Satoshi's whitepaper and vision have truly been revolutionary. Thanks for bringing this fascinating discussion to the forum! For anyone looking to get into trading and investing, I'd definitely recommend doing some research. A great way to start is by checking out books on trading for beginners. I found this article with 3 new books to consider: fbs.com/blog/top-3-new-books-of-tr.... I'm sure y'all will find something amazing to jumpstart your journey!

 
yournewempire profile image
Archie Smyth

Yes, I agree. This point you have made here reveals another benefit of crypto - the user has control over there assets, provided that the network is stable. As you say, it is the users fault for any mistakes. Nicely put. This would most likely teach users to be more meticulous and careful with their wallet. Fun discussion !

Collapse
 
iamaer4fa profile image
Andres Magalang • Edited

Blockchain transactions in Bitcoin are not encrypted. They are public, it is pseudonymous not anonymous.

Unlike in other cryptocurrencies like Pascalcoin where you have the option to encrypt a data payload or mandatory.

Collapse
 
narottam04 profile image
Narottam04

Thank you for correcting my mistake. I have made the necessary changes.

Collapse
 
iamaer4fa profile image
Andres Magalang

:)

Collapse
 
cess11 profile image
PNS11

If your threat model is 'cops will soon be involved in my finances because I deal in contraband' BTC might be "a [more] secure alternative".

But that's about it. You really, really need the absurd friction costs of doing criminal business to make the gas fees, lacking regulation and unaccountable or fraudulent institutions worth the effort to endure.

Collapse
 
johnkazer profile image
John Kazer

Gas fees do seem to vary a lot by platform. Which also seems an area in need of greater clarity and transparency.

Collapse
 
johnkazer profile image
John Kazer

@franjurinec I think you missed my main point, which was not about the principle (where I mostly agree with you) but about the practice, or implementation. So for example software linked to Solana just got hacked and coins to the tune of $320 million stolen. The Solana dev team are now responsible for retrieval of those coins - and have asked for them back... Which isn't much in the way of user protection.

Collapse
 
dhanmoni profile image
Dhanmoni Nath

That clears up a lot of confusion. Thank you!

Collapse
 
leewynne profile image
Lee

This is such an good post, I have added it as a guide to crypto on the MetaPunk Forem

Really enjoyed reading it

Collapse
 
narottam04 profile image
Narottam04

Thank you for sharing ❤️

Collapse
 
leewynne profile image
Lee

No probs -feel free to cross post with the original Canonical URL of course! Would love to have this on MetaPunk

Collapse
 
sahilpisal3105_44 profile image
SAHILPISAL3105

Very well explained!!! Good Work

Collapse
 
narottam04 profile image
Narottam04

Thank you!

Collapse
 
kamranation profile image
Kamran Baghirov

Thank you!

Collapse
 
aliraza211 profile image
AliRaza211 • Edited

I greatly appreciate your honesty and how this worked out for you. I’m trying to learn this and integrate this strategy into my portfolio, just wanna do it right. This helps a lot.

Collapse
 
narottam04 profile image
Narottam04

Glad you liked it!

Collapse
 
aman0210 profile image
aman0210

Very well explained!! Great work vro

Collapse
 
narottam04 profile image
Narottam04

Thank you bro❤️

Collapse
 
rockhold profile image
Brandon Rockhold

Thank you for this write up. The depth of detail here feels perfect!

Collapse
 
narottam04 profile image
Narottam04

Glad you liked it! ❤️

Collapse
 
andrewbaisden profile image
Andrew Baisden

Great explanation this is a topic that comes up a lot.

Collapse
 
narottam04 profile image
Narottam04

Thank you! Glad you liked it❤️

Collapse
 
omkarrgavhane profile image
Omkar Gavhane

Nice article ...Very well explained !!

Collapse
 
narottam04 profile image
Narottam04

Thank you❤️

Collapse
 
ibinolamichael profile image
Michael Ibinola

very well explained! that you so much for this

Collapse
 
narottam04 profile image
Narottam04

Glad you liked it ❤️

Collapse
 
avi1112 profile image
Avi1112

Well explained👍🏻

Collapse
 
jamessss3 profile image
jamessss3 • Edited

I strongly believe that news impact analysis plays a vital role in helping us understand the implications of breaking news on our society. Its neutral, short, and thematic nature on cryptovision.ai/ helps us navigate complex issues concisely, enabling us to make informed decisions based on accurate information.

Collapse
 
mavie1322 profile image
Teclaire Gladys Bahel • Edited

test