What is Cryptocurrency?

What is Cryptocurrency?” is a million dollar question, today.

Cryptocurrency is a virtual currency which was introduced in 2009. The first cryptocurrency was Bitcoin. It’s a digital currency or online currency. It is not like a coin or paper note, or any other physical currency. We can’t take it in our hand, but we can keep in our digital wallet.

The transaction of this currency can only be done by your computer of smart devices. There is zero control of any authority over it. There are almost 5000 types of such currency in the market, Ethereum, Ripple, Litecoin, Tether, Libra, etc. Earlier, it was illegal in many countries, but now legalized in many countries, including India in March 2020.

Now, many companies are providing option of cryptocurrency transaction along with other modes, like NetBanking, UPI, cash on delivery, etc. The reason behind its upright demand is that, it is more secure and transaction made by this mode never cancelled, like bank transactions.

It has fewer transection charge as comparison of other modes. This is because of zero control of any bank or other authority over it.

How Cryptocurrency Circulates?

Cryptocurrency is a shared digital record of ownership that is stored on a blockchain. It is sent by one user to another by their digital wallet. This transaction is verified by a process called mining.

Here are two new terms introduce in front of us. Let’s discuss about these to get better understanding of cryptocurrency market.

Blockchain

In simple word, we can say that blockchain is a shared digital register or record of data of ownership. It is a transaction history of every cryptocurrency. It tells, how an ownership of a cryptocurrency changed over time. Each block records refer a different transactions and every new transaction is introduced in a blockchain with a new box in the front of the chain. This chain also has a unique security feature that is not absent in normal computer files.

If we talk about its network consensus, then we will find that it is stored in multiple computers across huge network, rather than a single location. Within a network everybody can read it. This makes it more transparent and difficult to alter. Hence, there is not a single weak point that vulnerable to hack it. This is also zero percent chances of human and software error.

These blocks are linked together by cryptography (it is a combination of complex computer science and mathematics). If anyone try to alter the data will disrupt the cryptographic between blocks then computers in the network will quickly identify this fraudulent.

Cryptocurrency Mining

This is a process by which newest transection of user can be checked and instead of that new block is added to the blockchain. In this process, there are two important steps, those are:

Checking of Transactions

In cryptocurrency mining, the mining computers check the pending transaction. Then it ensures, that the sender has sufficient amount of funds to complete the transaction or not.

In this process, it checks the details of transaction against all the history stored in blockchain. There is another check for the confirmation of authorization of private key by the sender.

Creating of New Block

This is a process in which mining computers compile the valid transactions into a new block. Then it processed to create a cryptographic link to its last block by getting the solution to a complex algorithm.

When the system gets succeeded in generating the link it adds new block to its version of blockchain file and sends updates across its network.

Hence, the circulation of a cryptocurrency from one person to another is completed to know more about the cryptocurrency trading then have look on this article.

Difference between coin and token

Cryptocurrency is a virtual currency which was introduced in 2009. The first cryptocurrency was Bitcoin. It’s a digital currency or online currency. It is not like a coin or paper note, or any other physical currency. We can’t take it in our hand, but we can keep in our digital wallet.

What is Cryptocurrency Trading?

Cryptocurrency is a virtual currency which was introduced in 2009. The first cryptocurrency was Bitcoin. It’s a digital currency or online currency. It is not like a coin or paper note, or any other physical currency. We can’t take it in our hand, but we can keep in our digital wallet.