The Basics of Blockchain and Cryptocurrency

Among cryptocurrencies, Bitcoin is the most popular one with the largest market capitalization. So who created Bitcoin, and why?
It is said that in 2008, a person named Satoshi Nakamoto, watching the collapse of financial markets caused by the Lehman Brothers crisis, researched a way to make safe transactions without going through financial companies. Bitcoin emerged from this research.
(The name sounds Japanese, but Satoshi Nakamoto is a pseudonym, and it has still not been revealed who this person is or what country they are from).
So how can parties make safe transactions with each other in virtual space without going through a bank? The technology used for this is blockchain.
If you invest in Bitcoin, you should know why Bitcoin has value, and to understand that value, it helps a lot to know the basic principles behind it.
Let's take a simple look at how blockchain technology works.
Suppose there is a group of people who want to trade directly with each other without going through a bank, and there is a manager who manages this group. (Here, we assume it is a space where transactions take place only virtually, with nothing physical.)
A person named A sends 1,000 won to B. At this time, the manager records this transaction. Then the manager writes it in a ledger and distributes it to everyone participating in the group.
Then a person named C sends 2,000 won to D. The manager records this transaction in the ledger as well. A to B, 1,000 won; C to D, 2,000 won; and so on\.n In this way, the manager keeps writing the ledger and distributes it to everyone. If there are 100 people in the group, all 100 of them have this ledger.
When one ledger is full, transactions continue to be written in another ledger. And this process is repeated over and over.
You can think of the ledger described here as a block in blockchain technology. Just as the ledgers continue one after another, these blocks keep linking to the next block, and this is called a blockchain.
If one of the participants tries to forge a record, they would have to find and change every transaction that occurred after that transaction.
Moreover, because all participants have this ledger, it is impossible to forge just the records in one particular ledger.
The ledger records of all participants must match, and if only one particular person's records differ, the transaction is judged to be forged, is not treated as a valid transaction, and is discarded.
In this way, because blocks are linked to each other using cryptography, forgery or tampering is virtually impossible. Thanks to this principle, parties can make safe transactions with each other even without a central institution, such as a bank, overseeing the transactions.
So what role does Bitcoin play in this blockchain? The group's manager does the work of writing the ledger, but no one can work without any reward.
So the manager is paid for it. What is paid as this reward is Bitcoin. The manager does the work and receives a reward.
Because this reward is available, anyone wants to become a manager, and thanks to this principle, the blockchain can keep running.
Mining Bitcoin means becoming this manager, and the person who creates a block the fastest receives the reward of Bitcoin.
I believe that knowing how cryptocurrency works, as described above, and considering whether this technology could be used more widely in the future will also help with long-term investment in cryptocurrency.
If Bitcoin becomes the center of all transactions in the distant future, banks and many other financial institutions may have to find new businesses.