Hey there,
I'm a newbie and I have some questions about all of these weird currencies. I hope I find a legit answer!
• How are these currencies created?
• What makes them more valuable? (ex. why is the BTC price is $2700 while other currencies is $0.xx)
• How are they generated? (ex. if they're generated from the mining process doesn't that make them worthless? because they literally came from nothing and they're nothing but just numbers in your wallet and it also means that the owner of that currency can generate coins into his wallet for free, doesn't it?)
• What are these encrypted hashes used for?
• Is it legal?
• What do you think about the future of the crypto-currencies?
1) Usually through an algorithm that does calculations to determine how much you should get "paid"
2) How much people are willing to pay for them, this is based on a number of factors such as application (how they're used), popularity etc.
3) How do you think real world currency is created? What makes a $1 bill worth a dollar? Isn't it surely just worth the paper it's printed on? Same scenario.
4) What encrypted hashes?
5) Yes, as long as you don't use the coins for bad things.
6) The future and we're only just getting started.
1) what are these calculations used for? why do they exist?
3) real world currency are way more different that this, in the real world currency you cannot print a $1 bill without having equal amount of stored gold to this bill if you do that your currency value will drop.
4) it's related to the calculations that our gpu's solve to get rewarded [same as first question]
Hmmm....
I'm not sure if you are serious, but I'll bite.
1. The calculations are done to validate transactions. A real-world equivalent would be when you go to the store and you want to buy something... this is a transaction. You hand a cashier a $100 bill and they use a pen to see if it's real... that pen is what mining does in a cryptocurrency transaction. It verifies that the transaction is real and not fake. The great thing about cryptocurrencies is that the process is automated, no need for a human to be in the middle to perform a transaction. No need for a bank to "validate" that you have money in your account to send. No need for a middle man, or escrow to hold, validate, and transmit the money. Automation is the future, and cryptocurrencies are working to solve many automation problems in the financial sector.
3. Real world currencies are not tied to any gold standard anymore. A $1 bill is not worth $1 of gold... hasn't been this way for decades. Don't worry, many people don't understand how money works... but the more you learn, the more you will get angry, and you will want to support cryptocurrencies. A "dollar" is just a store of value. In fact, it's a virtual store of value. It's value changes in relation to other currencies, and in real-world transactions. You may be able to buy one apple with a $1 bill today, but if there was a problem in the apple market, and they became scarce, you may only be able to buy an apple with a $100 bill. Then you have issues such as inflation, devaluation, and more. The only thing backing a $1 bill is the "full faith, trust, and
credit of the Federal Reserve/Government".
4. There are tons of articles and videos that will give high-level over views of what hashes are used for. If you are looking for a technical resource, then I suggest the bitcoin (or many other cryptocurrencies) whitepapers. They explain in detail how the process works.
