This chapter covers:
- What cryptocurrencies are and how they were made possible thanks to consensus algorithms.
- The different types of cryptocurrencies that exist.
- How the Bitcoin and Diem cryptocurrencies work in practice.
Can cryptography be the basis for a new financial system? This is what cryptocurrencies have been trying to answer since at least 2008, when Bitcoin was proposed by Satoshi Nakamoto (who to this day has yet to reveal their identity). Before that, the term "crypto" had always been used in reference to the field of cryptography. But since the creation of Bitcoin, I have seen its meaning quickly changing and being used to refer to cryptocurrencies. Cryptocurrency enthusiasts, in turn, seem to get more and more interested to learn about cryptography. Which makes sense, as cryptography is at the core of cryptocurrencies.
But first, what’s a cryptocurrency? It is two things: