What is Fency's distributed legder virtual currency, FencyCoin?

FencyCoins are a virtual currency (like rewards points or airline miles you earn, they only exist electronically) but are managed by a distributed group of machines maintaining copies of the transactions.

First, about blockchain (another word for distributed ledger systems)...
In the simplest of terms, blockchain is a string of transactions, grouped into blocks, and joined together in a sequential chain.

Each block has a small part of the previous block encoded within itself. This chain of data is the blockchain. New blocks can't be inserted before old blocks, only added at the end. Each block is formed in such a way that it would take too much computing power to re-create fake transactions and insert it into the block. This means that you can trust the information earlier in the block as being accurate at the time it was added. To date, this structure has been proven to be impossible to hack using current computer technology.


Now, virtual currency...more specifically cryptocurrency...
Virtual currency is basically a currency that is electronic. It doesn't physically exist anywhere but on computers.

Cryptocurrency is virtual currency that cannot be used or spent by anyone that does not have the private key to place a "digital signature" on a transaction or payment.

When stored on a blockchain, virtual currency becomes a very secure financial instrument that is stored on multiple computers, yet none of them can be spent or use unless it's theirs; as evidenced by providing one's private key.

Having FencyCoins is so secure, it would be like handing your credit card over to a stranger on the street and they would have zero chance of spending any money with it. Your bank cannot guarantee this kind of security, which is why they need the FDIC to give you your money back in case it's lost.

Article ID: 20, Created On: 7/10/2018, Modified: 7/10/2018

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