A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network. However, one organization governs the network, controlling who is allowed to participate, execute a consensus protocol and maintain the shared ledger. Depending on the use case, this can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on premises.
Distributed ledger technology has the potential to speed transactions because it removes the need to go through a central authority or middleman. Similarly, DLT could reduce the cost of transactions. However, running the highly decentralized verification process and distributing copies of the ledger take substantial computing resources, which has been shown to hurt the performance of DLTs in certain networking environments compared to centralized ledgers.
A simple analogy for how blockchain technology operates can be compared to how a Google Docs document works. When you create a Google Doc and share it with a group of people, the document is simply distributed instead of copied or transferred. This creates a decentralized distribution chain that gives everyone access to the base document at the same time. No one is locked out awaiting changes from another party, while all modifications to the document are being recorded in real-time, making changes completely transparent. A significant gap to note however is that unlike Google Docs, original content and data on the blockchain cannot be modified once written, adding to its level of security.
Cryptocurrency serves as a medium of exchange, a store of value, and a unit of measure. While cryptocurrencies have little inherent value, they are used to price the value of other assets. Bitcoin is a cryptocurrency (means of payment) but it can bee seen as a speculative commodity (how much is it trading for), it was launched in 2009 and it is widely considered the first digital asset. Digital assets, also known as crypto assets, are digital representations of value made possible by cryptography and blockchain. Their original intent was to serve as a vehicle for transferring value without the use of a bank or other trusted third-party entity. Cryptoassets (digital assets) are categorized into three main types: cryptocurrencies, crypto commodities, and crypto tokens. One emerging discussion is the concept of stablecoins, cryptocurrencies pegged to a stable asset like the U.S. dollar and may become a critical component in decentralized finance (DeFi).
Recently, South Korean regulators have proposed stricter measures, including a tax increase to 20% on gains from cryptocurrency trading, and new laws governing financial transaction reporting that aim to prevent scams and fraudulent ICOs. At the same time, the Korean central bank has announced that it is developing a CBDC and a decentralized identification platform. Some of the largest payment applications in South Korea, including Chai and Kakao, have already integrated blockchain and tokens into their operations.
According to Wikipedia, this is what cryptocurrencies are: A cryptocurrency (or crypto currency or crypto for short) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
Think of a crypto wallet as an email account. To receive an email, you need to give people your email address. This would be your public key in the case of crypto wallets, and you need to share it with others to be a part of any blockchain transaction. However, you would never give someone the password to access your email account. For crypto wallets, that password is the equivalent of your private key, which under no circumstances should be shared with another person. 2b1af7f3a8