What is cryptocurrency?
No one is in a position to challenge the fact that the rise in bitcoin prices at the end of 2017 is largely due to the excitement around crypto. When it was launched in 2009, its value was a small fraction of the US dollar. And a lot of people knew nothing about it.
Increased interest in crypto.
This can be explained by the exponential increase in the value of Bitcoins in 2016 and, especially, in 2017. In a short time, several people became what the world began to call “millionaires of Bitcoins.”
And that ‘s why so many people want to know about this virtual currency. Well, it ‘s not just bitcoin that ‘s proven to be great. Some other cryptocurrencies, such as Ethereum, Litecoin and Ripple, had impressive growth rates, culminating in what some predicted was a peak and that the bubble burst.
Although prices are changing a lot, crypto still continues to exist. And it looks like she ‘s here to stay for a long time.
If you ‘re new to it and you have a lot of questions about Bitcoin and the technology behind it, then here ‘s what you need to know about cryptocurrency.
What is cryptocurrency?
Crypto is just a digital currency. In other words, it is an asset (mostly tokens) that functions as a normal legal payment. One of its main uses is to facilitate the exchange of goods and services on the Internet.
It is sometimes referred to as CRYPTO – speaking abbreviated. The website CoinMarketCap .com lists more than 2,600 crypto. The most common of these are Bitcoin BTC, Ethereum ETH, Litecoin LTC, Ripple XRP, Advcash USD, Tether USDT and others.
The term cryptocurrency came about because of the connection these digital currencies have with cryptography. It is cryptography that helps protect all transactions, as well as regulate the creation or release of new coins.
Therefore, we can say that crypto is a form of digital cash created in a network of connected computers using cryptography. These forms of currency are carried out within the peer-to-peer network without the involvement of an intermediary or a third party.
What else do you need to know about this?
Cryptocurrency exists exclusively in digital form and uses what is called a register stored in a blockchain (Blockchain). All transactions are performed using this particular chain of blocks to record all transactions. While traditional currencies are regulated and fall under the control of a central financial institution, the cryptocurrency is NO.
With traditional paper currencies, the government issues new currencies through banks. On the contrary, cryptography is created only with the help of agreed algorithms. We ‘ll go back to that when we consider how cryptocurrency works. Another thing is that cryptocurrencies are decentralized and therefore have no boundaries. You can access it and use it to make deals from anywhere in the world.
What ‘s the link between cryptocurrency and blockchain?
As soon as you understand what is cryptocurrency, you will want to learn how it works. It is very important aspect of what distinguishes digital currencies from fiat. The first that needs to be understood, is that cryptocurrencies use technology of a blockchain. So, before we will describe how they work, let’s find out how the blockchain and cryptocurrency depend from each other.
The blockchain is, in fact, the digital account book sometimes called by the database in which invariable record of all transactions which were ever carried out in network is stored. Networks of computers work together to guarantee that all transactions are valid. It is what does a blockchain decentralized as all should be convinced of network that transactions are really confirmed.
A group of transactions assembled together form a single “block.” The first block is called the genesis block and contains a package of all transactions verified by multiple people (computers) around the world. The process continues as new blocks are added, forming a chain. That ‘s what blockchain is.
Originally designed to support accounting for all transactions, blockchain technology has helped create cryptocurrencies that enable the development of intelligent contracts and decentralized applications.
As the cryptocurrency works.
Cryptocurrencies use cryptography to make transactions safe and unchanged. For cryptocurrency to work, there must be digital coins that are sent from one person to another. This is called peer-to-peer or p2p.
It is important to note that there are cryptocurrencies that generate new coins, and there are those that create all the necessary coins at the beginning. All the total number of coins that ever existed is called maximum stock, and the current quantity used is called negotiable stock.
How to buy cryptocurrency?
You can get cryptocurrency in several ways, but the two most common methods include buying and mining. You can also pay for work, get donations or play games to earn cryptocurrency. If you want to find out how to buy the most popular cryptocurrency, visit Privat.Сash for more information.
You can also buy cryptocurrency on our website by visiting Privat.Сash from any country in the world.
To send these coins, you need to have a purse. This software or the device which stores obtains or allows to send cryptographic data. It is more similar to your normal bank account or the PayPal account. In a wallet there are two keys – public and private. The public key is similar to number of your bank account. The private key is equivalent to your PIN code or the password.
Anyone can browse your public key in a chain of blocks and send you money. However, to get access to this money (in a wallet or a purse), it is necessary to have at itself a private key. When someone sends some cryptocurrency, we will allow bitcoin, record develops together with other transactions for forming of “block”.
Everyone can see the amount of money sent, but they can ‘t see the sender or recipient. This is possible thanks to encryption, a process that hides all personal data. In order to verify transactions, special computers or equipment on the network (nodes) compete to protect a block containing a certain number of cryptographic elements, i.e. they are “mine.”
What is cryptocurrency mining?
We mentioned that when the transaction is made in network of cryptocurrency, it is immediately aired to miners (miners). We call verification process of the specific transaction mining.
Now there are several ways of production of blocks. For those coins which are engaged in mining nodes reach a consensus, solving difficult algorithmic puzzles. Originally, you could get bitcoins by means of the processor or GPU.
Now complexity of production of cryptocurrencies raised to such an extent that miners integrate the computing power to increase chances of success. Nevertheless, all of you still can use your video card GPU to mine some cryptocurrencies.
The first knot to find the block is awarded with “new coins.” For example, miners received 12.5 bitcoins as a reward for mining a new block. This amount decreases over time. Thus, in crypto, the mining industry plays a very important role. This helps to issue new coins.
The cryptocurrency industry is constantly growing, covering more areas for its application, in addition to simply being used as a means of exchange. Therefore, in order to fully understand what crypto does or can do, you need to constantly updаte your knowledge about it.
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