Welcome to Steemit Lesson 2!
I aim to educate the users about the important topics I learned and what do they need to know about Steemit. Though there's FAQ Page where users can be guided, there are instances they prefer to read blogs from users maybe because they're based on experiences and own personal understanding.
People tend to find Steemit difficult because the technology is not the traditional and typical blogging website where the focus is only writing content, improving your followers, or creating an influence to the platform. They need to understand first what powers Steemit, how blockchain technology influenced the Steem ecosystem, and cryptocurrencies Steem and Steem Dollars exist in the platform.
Design credits : @rayhan97
Let's start by defining these important terms : Cryptocurrencies and Blockchain Technology
What are Cryptocurrencies?
Crytpocurrencies are digital assets that are created, held, or spent electronically around the world. Cryptocurrencies exist in the internet. The purpose of cryptocurrencies are the following :
- Buying products by the use of cryptocurrency.
- Peer to peer electronic sending of cash without third party charges.
- Using cryptocurrencies for privacy (e.g. Monero).
- Using cryptocurrencies to avail technology services (Ex. Siacoin for storage, Agrello, Etherium, etc.)
- Buying/selling cryptocurrencies in person (P2P selling).
- Or exchanging it to other currencies.
How are these Currencies created?
There are a lot of cryptocurrencies that are "mined" from complex nodes that are solved using algorithms. Transactions are often unimaginable and cannot be solved by human. If humanity tries to solve it, it would take more than a minute to solve every transaction. Instead, they rely on computers (graphics card) to solve those complex transactions in an instant amount of time. This is one of the reasons why cryptocurrencies are gaining a lot of attention today, it performs numerous transactions in just a few seconds. Take STEEMIT for example, where we are assured of a 3 second transaction!.
Design credit : @kyriacos
Computers that support the transactional functionality of cryptocurrency are sometimes known as "nodes" or "miners". In most cases, miners are rewarding for processing blogs/transactions.
Why Do We Need to use Cryptocurrencies?
The current traditional system requires a third party to store and verify the transactions that we made. Though our information are stored privately, it needs a ton of fees and processes to perform transactions like sending of payment, deposits, withdrawals, etc. There will be series of processes and mostly it requires fees.
The current traditional system were also inefficient because it takes longer time to perform transactions. It is also be vulnerable to human errors and attacks. Well, cryptocurrencies are secured and efficient because it uses the blockchain technology. It consist of a network of peers working together where every peer has a record of the complete history of all transactions, with all peers being always updated. This remains the balance of every account because everyone has the copy of all the transactions.
This list of transactions is called a "blockchain".
What is Blockchain?
As mentioned its a list of transactions, a record book, a public ledger, or simply a database of all of the transactions. What it does is that it updates all of the peer in a network, making every transaction transparent. Everyone gets notified on every transaction made. Just like with Steemit, it uses a Graphene Blockchain Technology where everyone gets updated and be able to see all of the transactions made.
Speaking about transactions, how does it work? For example, how can I send digital money/cryptocurrencies from a friend? How do we send from one person to another? Or how do we send cryptocurrencies from exchanger to our wallets?
How Does a Transaction Work?
Every transactions require two important and unique elements : the PUBLIC and PRIVATE KEYS.
Public Keys are the same as your account number. The same as your receiving wallet address where they need to get it in order for them to send into your account. Just like the name suggests, your public key is accessible to anyone.
A Private Key is a key that you should only know. It is basically your password where if anyone gets a copy of it, they can be able to access your account and manage to perform transactions. So be careful in keeping your private key.
If you would like to read my previous Steemit Lessons, feel free to click the active link below.
Steemit Lesson 1 : The Best Way to Power-up Your SBDs
I hope to share more Steemit lessons with you and I hope I get your support about this series.
Namaste,
