CloudCoin, and the technology upon which it operates, is new.
It is so new that it is often confused with older technologies like blockchain-based currencies such as Bitcoin. That being said, blockchain tech can be considered a predecessor to CloudCoin, as it has some fundamental similarities
In order to view CloudCoin in true context, it is helpful to understand what blockchain has solved and why it evolved in the first place.
With that foundation, we can demonstrate how CloudCoin took the essence of blockchain to a whole new level, and why that evolution was needed.
Cryptocurrencies and Blockchain
A well-known blogger by the name of Simon Dell has said: “To understand Bitcoin, you need to understand blockchain. They are two different things. Blockchain is the grandfather technology on which Bitcoin is built and it’s what is known as a ‘distributed ledger’.”
Dell explains this in much greater detail, but he went on to explain that a ledger is essentially a spreadsheet on which account information is kept.
The way it works is that the accounts of everyone using a particular blockchain are permanently recorded on one ledger.
A copy of this ledger is accessible to anyone who wants to view it, making it a transparent, semi-public record. It’s semi-public in that a pseudonym (a fictitious name) is shown in place of your real name, which visible to anyone who knows or cares to look.
Here’s a picture of an ordinary ledger, as taken from Wikipedia:
Blockchain is considered to be a decentralized or distributed ledger. The idea behind this is that the information isn’t housed in one location, but in many, which makes it extremely difficult to alter the data.
To that degree, no one can manipulate the ledger to their benefit. For the data to updated, it requires the ‘consensus’ of locations the ledger has been distributed to.
The ledger can be added to, but the data already on the ledger cannot be changed or deleted.
With Bitcoin, these distributed ledgers (blockchains) are updated every time deposits or withdrawals occur. And the files can get very big.
In fact, one of the problems with these ever-increasing files is that they require huge storage capacity, as well as processing power to validate each transaction that is added to the ledger.
However, the basic idea with blockchain, which is a good one, is that no one person or entity needs to be trusted and that your financial business can be kept semi-private.
For instance, if someone wants to send you money (Bitcoin or some other cryptocurrency), they send it to your ‘public key’. The public key (a long random-looking string of numbers) is an address for a blockchain.
It’s like the address where you live, but much longer.
A private key is a password. The password must be stored somewhere safe, and you need to keep it secret.
With blockchain, the idea is that it is the system itself and its decentralization which assures that only you, the password holder, can control the status of that account on the ledger, aka your money.
In conclusion, there are many good things about blockchain and blockchain-based cryptocurrencies, but there are also drawbacks and limitations inherent in how they function.
Which is why something NEW was needed.