The basics of cryptocurrency and the way it works

In the times we live in, technology has made incredible advances compared to any time in the past. This evolution redefines human life in almost every aspect. In fact, this evolution is a continuous process, and thus human life on earth is constantly improving day by day. One of the newest inclusions in this aspect is cryptocurrencies.

Cryptocurrency is nothing but a digital currency that is designed to require security and anonymity in online money transactions. It uses cryptographic encryption both to generate currency and to verify transactions. New coins are created through a process called digging, while transactions are recorded in a public ledger called the Transaction Block Chain.

A little back

The evolution of cryptocurrency is mainly attributed to the virtual world of the network and involves the procedure of transforming readable information into code that is almost impenetrable. This makes it easier to track purchases and transfers involving currency. Cryptography, after its introduction during World War II for secure communication, has evolved into this digital age, mingling with mathematical theories and computer science. Thus, it is now used to provide not only communication and information, but also for money transfers in the virtual network.

How to use cryptocurrency

It is very easy for ordinary people to use this digital currency. Just follow the steps below:

  • You need a digital wallet (obviously to store the currency)
  • Use the wallet to create unique public addresses (this allows you to receive the currency)
  • Use public addresses to transfer funds to or from your wallet

Cryptocurrency portfolios

A cryptocurrency wallet is nothing but a software program that can store both private and public keys. In addition, it can also interact with various blockchains so that users can send and receive digital currency, as well as monitor their balance.

The way digital wallets work

Unlike conventional wallets, which we carry in our pockets, digital wallets do not store currency. In fact, the concept of the blockchain is so intelligently mixed with cryptocurrency that currencies are never stored in a certain place. Nor do they exist anywhere in hard money or physical form. Only records of your transactions are stored in the blockchain and nothing else.

Real life example

Suppose a friend sends you some digital currency, say in the form of bitcoin. What this friend is doing is transferring ownership of the coins to the address of your wallet. Now, when you want to use this money, you unlock the fund.

To unlock the fund, you need to match the private key in your wallet with the public address to which the coins are assigned. Only when these private and public addresses match will your account be credited and your wallet balance increase. At the same time, it will reduce the balance of the sender of the digital currency. In digital currency transactions, the actual exchange of physical coins never takes place.

Understanding the cryptocurrency address

By nature, this is a public address with a unique string of characters. This allows a user or digital wallet owner to receive cryptocurrency from others. Each public address that is generated has a matching private address. This automatic match proves or establishes ownership of a public address. As a more practical analogy, you might consider a public cryptocurrency address as your email address to which others can send emails. Emails are the currency that people send you.

Understanding the latest version of the technology in the form of cryptocurrency is not difficult. One needs a little interest and spending time online to clarify the basics.

What is a cryptocurrency? Here’s what you need to know

Cryptocurrency is a type of digital currency that you can use to buy goods and services. For secure transactions, cryptocurrencies depend on an extremely complex online registry. Millions of people around the world are investing in these unregulated currencies to make money. Of all these popular cryptocurrencies, bitcoin tops the list. In this article we will go deeper into the cryptocurrency. Read on to learn more.

1. What is a cryptocurrency?

You can generally pay with cryptocurrency to buy goods or services online. Today, several companies launched their own cryptocurrency. Known as tokens, they can be traded for goods and services. You can think of them as casino chips or arcade tokens. You can use your real currency to buy cryptocurrency to make these transactions.

Cryptocurrencies use a state-of-the-art system known as the blockchain to verify transactions. This decentralized technology is powered by many computers that are programmed to manage and record transactions. Security is the best thing about this technology.

2. What is the value of cryptocurrency?

Today there are over 10,000 types of cryptocurrency. And they are traded around the world, according to reports from CoinMarketCap. Currently, the value of all available cryptocurrencies is over $ 1.3 trillion.

At the top of the list is bitcoin. The value of all bitcoins is $ 599.6 billion, give or take.

3. Why are they so popular?

Cryptocurrencies are very attractive for a number of reasons. The following are some of the most common:

Some people believe that cryptocurrency is the currency of the future. That is why many of them are investing their hard-earned money in the hope that the cryptocurrency will rise in a few years.

Some people believe that this currency will be free of central bank regulations, as these institutions reduce the value of money through inflation.

Some proponents prefer the technology that powers cryptocurrencies, which is blockchain. In principle, this is a decentralized recording and processing system that can offer a higher level of security than conventional payment systems.

Some speculators are turning to cryptocurrency just because its price is rising.

4. Is it a good investment?

According to most experts, the value of cryptocurrencies will continue to grow over time. However, some experts suggest that this is just speculation. Just like real currency, this type of currency has no cash flow. Therefore, if you want to win, someone has to pay a higher amount of money to buy the currency.

Unlike a well-run business that grows over time, cryptocurrency has no assets. But if a cryptocurrency stays stable for a long time, it will certainly help you earn a lot.

In short, this was a basic introduction to cryptocurrency. We hope that this article will help you get acquainted with this new type of currency.

What is bitcoin and why is cryptocurrency so popular?

Bitcoin is a popular word in the financial space. In fact, bitcoin has exploded the scene in the last few years, and many people and many large companies are now jumping on bitcoin or cryptocurrency, wanting some of the action.

People who are completely new to the realm of cryptocurrencies are constantly asking this question; What exactly is bitcoin?

Well, for starters, bitcoin is actually a digital currency that is beyond the control of any federal government, used around the world, and can be used to buy things like your food, drinks, real estate, cars, and more.

Why is bitcoin so important?

Bitcoin is not susceptible to things like government control and fluctuations in foreign currencies. Bitcoin is supported by the full faith of (you) the individual and is strictly equal.

This means that everyone makes bitcoin transactions, the first thing they realize is that it is much cheaper to use than trying to send money from bank to bank or using other services that require sending and receiving money internationally.

For example, if I wanted to send money to, say, China or Japan, I would have to have a fee from a bank and it would take hours or even days for that money to get there.

If I use bitcoin, I can do it easily from my wallet, mobile phone or computer instantly without any of these fees. If I wanted to send, for example, gold and silver, it would require a lot of guards, it would take a lot of time and a lot of money to move the bars from point to point. Bitcoin can do it again with the touch of a finger.

Why do people want to use bitcoin?

The main reason is that bitcoin is the answer to these destabilized governments and situations where money is no longer as valuable as it used to be. The money we have now; the paper fiat currency in our wallets is useless and will cost even less in a year.

We even see large companies that are interested in blockchain technology. A few weeks ago, a survey was conducted among a handful of Amazon customers to see if they would be interested in using cryptocurrency if Amazon created one. The results of this showed that they are very interested. Starbucks even hinted at using a blockchain mobile app. Walmart is even applying for a “smart package” patent that will use blockchain technology to track and authenticate packages.

All our lives we have seen many changes in the way we shop, the way we watch movies, the way we listen to music, read books, buy cars, look for homes, now how we spend money and banking. The cryptocurrency is here to stay. If you haven’t already, it’s time for everyone to fully explore the cryptocurrency and learn how to take full advantage of this trend, which will continue to thrive over time.

A brief introduction to Blockchain – for normal people


If you have tried to immerse yourself in this mysterious thing called a blockchain, you will be forgiven for stepping back in horror at the sheer opacity of the technical jargon often used to shape it. So before we get into what cryptocurrency is and how blockchain technology can change the world, let’s discuss what a blockchain really is.

Simply put, the blockchain is a digital transaction log, unlike the registries we have used for hundreds of years to record sales and purchases. The function of this digital book is in fact almost identical to the traditional book, as it records debits and credits between people. This is the basic concept behind blockchain; the difference is who keeps the book and who checks the transactions.

In traditional transactions, payment from one person to another involves some kind of intermediary to facilitate the transaction. Let’s say Rob wants to transfer £ 20 to Melanie. He can either give her cash in the form of a £ 20 banknote, or he can use a banking application to transfer the money directly to her bank account. In both cases, the bank is an intermediary that checks the transaction: Rob’s funds are checked when he withdraws money from an ATM, or checked by the application when he performs the digital transfer. The bank decides whether to continue the transaction. The bank also keeps records of all transactions made by Rob and is solely responsible for updating them each time Rob pays someone or receives money in his account. In other words, the bank holds and controls the book and everything flows through the bank.

This is a big responsibility, so it is important that Rob feels that he can trust his bank, otherwise he will not risk his money with them. He must feel confident that the bank will not deceive him, will not lose his money, will not be robbed and will not disappear overnight. This need for trust is at the heart of almost every basic behavior and aspect of the monolithic financial industry, to the extent that even when it was discovered that banks were irresponsible with our money during the 2008 financial crisis, the government (another intermediary ) chose to save them instead of risking destroying the last fragments of trust, leaving them to collapse.

Blockchains work differently in one key respect: they are completely decentralized. There is no central clearing house like the bank and no central book held by one person. Instead, the book is distributed in a vast network of computers called nodes, each of which holds a copy of the entire registry on their respective hard drives. These nodes are connected to each other through software called a peer-to-peer (P2P) client, which synchronizes data on a network of nodes and ensures that everyone has the same version of the registry at any given time. .

When a new blockchain transaction is introduced, it is first encrypted using state-of-the-art cryptographic technology. Once encrypted, the transaction is transformed into something called a block, which is essentially the term used for an encrypted group of new transactions. This block is then sent (or broadcast) to the network of computer nodes, where it is checked by the nodes and, after being checked, transmitted over the network so that the block can be added to the end of the computer registry of anyone under the list of all previous blocks. This is called a chain, so the technology is called a blockchain.

Once approved and recorded in the book, the transaction can be completed. This is how cryptocurrencies like bitcoin work.

Accountability and removal of trust

What are the advantages of this system over the banking or central clearing system? Why would Rob use bitcoin instead of normal currency?

The answer is trust. As mentioned above, it is extremely important for the banking system that Rob trusts his bank to protect his money and handle it properly. To ensure that this happens, there are huge regulatory systems that check the actions of banks and ensure that they are appropriate for the purpose. Governments then regulate regulators, creating something like a multi-level system of inspections, the sole purpose of which is to help prevent errors and misconduct. In other words, organizations like the Financial Services Authority exist precisely because banks cannot be trusted alone. And banks often make mistakes and misbehave, as we have seen too many times. When you have a single source of power, power tends to be abused or abused. The relationship of trust between people and banks is awkward and uncertain: we don’t really trust them, but we don’t think there are many alternatives.

Blockchain systems, on the other hand, do not require you to trust them at all. All transactions (or blocks) in a blockchain are checked by network nodes before they are added to the book, which means that there is no single point of failure and no channel of approval. If a hacker wants to successfully tamper with the blockchain registry, he will have to hack millions of computers at once, which is almost impossible. The hacker would also be unable to remove a blockchain network, as he would again have to be able to disconnect any computer on a network from computers distributed around the world.

The encryption process itself is also a key factor. Blockchains like bitcoin deliberately use difficult processes for their verification procedure. In the case of bitcoin, blocks are checked by nodes that intentionally processor-intensive and time-consuming series of calculations, often in the form of puzzles or complex mathematical problems, which means that the check is neither instantaneous nor accessible. Nodes that engage the block verification resource are rewarded with a transaction fee and generously from newly minted bitcoins. This has the function of stimulating people to become nodes (because processing blocks like this requires quite powerful computers and a lot of electricity), while at the same time dealing with the process of generating – or cutting – currency units. This is called digging because it involves a significant amount of effort (in this case from a computer) to produce a new product. This also means that transactions are verified in the most independent way possible, independent of a government-regulated organization such as the FSA.

This decentralized, democratic and highly secure nature of the blockchain means that they can operate without the need for regulation (they are self-regulating), government or other non-transparent intermediaries. They work because people don’t trust each other, not in spite of themselves.

Let the meaning of that sink in for a while and the excitement around the blockchain begins to make sense.

Intelligent contracts

Where things get really interesting are blockchain applications beyond cryptocurrencies like bitcoin. Given that one of the basic principles of the blockchain system is secure, independent transaction verification, it is easy to imagine other ways in which this type of process can be valuable. Not surprisingly, many such applications are already in use or under development. Some of the best are:

  • Smart contracts (Ethereum): perhaps the most exciting development of the blockchain after bitcoin, smart contracts are blocks that contain code that must be executed in order for the contract to be executed. The code can be any, as long as the computer can execute it, but in simple words it means that you can use blockchain technology (with its independent verification, unreliable architecture and security) to create a kind of escrow system for any type of transaction . As an example, if you are a web designer, you can create a contract that checks whether a new client’s website has been launched or not, and then automatically release your funds once that happens. No more harassment or invoicing. Smart contracts are also used to prove ownership of an asset such as property or art. The potential for reducing fraud with this approach is huge.
  • Cloud storage (Storj): Cloud computing revolutionized the network and led to the emergence of Big Data, which in turn launched the new AI revolution. But most cloud-based systems run on servers stored on single-location server farms owned by a single entity (Amazon, Rackspace, Google, etc.). This poses the same problems as the banking system, as your data is controlled by a single, non-transparent organization that is a point of failure. Dissemination of data in a blockchain completely eliminates the problem of trust and also promises to increase reliability, as it is much more difficult to remove a blockchain network.
  • Digital identification (ShoCard): Two of the biggest problems of our time are identity theft and data protection. With huge centralized services like Facebook storing so much data about us, and the efforts of various governments in developed countries to store digital information about their citizens in a central database, the potential for misuse of our personal data is appalling. Blockchain technology offers a potential solution to this by wrapping your key data in an encrypted block that can be verified by the blockchain network when you need to prove your identity. The applications of this range from the obvious replacement of passports and ID cards to other areas such as password replacement. It can be huge.
  • Digital voting: very relevant after the investigation into Russia’s influence on the recent US elections, digital voting has long been suspected of being both unreliable and highly vulnerable to counterfeiting. Blockchain technology offers a way to verify that a voter’s vote was sent successfully while maintaining their anonymity. He promises not only to reduce election fraud, but also to increase overall voter turnout, as people will be able to vote on their mobile phones.

Blockchain technology is still in its infancy and most applications are far from common. Even bitcoin, the most established blockchain platform, is subject to enormous instability, indicative of its relative newcomer status. However, the potential of the blockchain to solve some of the major problems we face today makes it an extremely exciting and enticing tracking technology. I will certainly be careful.

Digital currency


Cryptocurrency is a digital currency. Also called virtual currency. It is a digital asset that processes its transactions using cryptography, uses impenetrable cryptography and validates transactions. In many countries, cryptocurrencies are used as alternative currencies. Bitcoin was added in 2009 as the first decentralized cryptocurrency. Then many different cryptocurrencies appeared on the market. They are commonly known as altcoins. These currencies use decentralized management as a counterbalance to centralized digital money and central banking systems.

Distributed management uses the Bitcoin blockchain transaction database as a paid ledger. An encryption device generates a decentralized cryptocurrency at a predetermined price, which is communicated to the public. In central banking and the Federal Reserve system, boards of directors or governments manage the disbursement of currency through printed units of cash, and the exchange takes place through digital banking books. However, in a decentralized cryptocurrency, companies or governments cannot create new entities or provide support to different companies, banks or companies that hold an asset.

Satoshi Nakamoto Group has created the main technical gadget for decentralized cryptocurrencies. By September 2017, almost a thousand cryptocurrencies had been created, most of which were comparable to bitcoin. In cryptocurrency systems, security, integrity and general ledgers are maintained with the help of a team of mutually suspicious countries known as diggers, whereby the general public is validated through the use of their computer systems and time stamp transactions are maintained under a specific time stamp scheme. . Miners to maintain the security of the cryptocurrency registry for economic reasons.

Most cryptocurrencies constantly minimize the production of currency, limiting the total amount of currency in circulation and imitating precious metals. Unlike ordinary currencies, which are held through monetary institutions, such as holding cash, cryptocurrencies are difficult to confiscate from law enforcement. This problem is due to the use of cryptographic technologies. Law enforcement officials faced this problem in the case of the Silk Road, in which Ulbricht’s bitcoin was “encrypted”. Cryptocurrencies such as bitcoin are aliases, although add-ons such as Zerocoin have been proposed to ensure authentic anonymity.

An unknown person or human beings used the title Satoshi Nakamoto and added bitcoin in 2009, the first digital currency. SHA-256, a cryptographic hash function, was used as a working scheme in it. Namecoin was in April 2011. Litecoin was released in October 2011. Scrypt had a hash feature in it. The cryptocurrency, Peercoin uses the hybrid as proof of work. IOTA does not use blockchain, it uses entanglement. Built on a custom blockchain, The Divi Project allows seamless buying and selling between portfolio currencies and the ability to use information that cannot be publicly identified for transactions. Many unique cryptocurrencies have since been created, but only a few have been successful because they lack technical innovation.

The first bitcoin ATM was installed in Texas, USA on February 20, 2014, by the creator of Robocoin, Jordan Kelly. This ATM was identical to ATMs, but examined identifications such as a consumer’s passport or driver’s license with the help of scanners. Almost 1574 bitcoin ATMs were installed in different countries in 2017, and in 2017 a total of 3 ATMs were connected per day.

The legal status of cryptocurrencies deviates greatly from the state and is still permanent in many of them. Although some countries have clearly allowed their use and trade, others have banned it. In addition, different government institutions have restricted bitcoins in different ways. In 2014, the Central Bank of China banned the treatment of bitcoins by financial institutions in China. In Russia, however, cryptocurrencies are legal, although it is criminal to use another currency to buy goods other than the Russian ruble. The United States Internal Revenue Service allowed bitcoin to be subject to capital gains tax, and on March 25, 2014, that decision clarified the legality of bitcoin.

History of the cryptocurrency

The advent of cryptocurrency is already interfering in our daily transactions. Cryptocurrency is a digital asset that exists in the crypto world, and many call it “digital gold”. But what exactly is a cryptocurrency? You must be wondering.

It is a digital asset designed to be used as a medium of exchange. It is clear that this is a close substitute for money. However, it uses strong cryptography to secure financial transactions, verify the transfer of assets and control the creation of additional units. The entire cryptocurrency is either a virtual currency, a digital currency or an alternative currency. It should be noted that all cryptocurrencies use a decentralized control system, unlike the centralized systems of banks and other financial institutions. These decentralized systems operate through distributed book technology that serves a public financial database. A blockchain is usually used.

What is a blockchain?

This is an ever-growing list of records that are linked and protected using cryptography. This list is called blocks. A blockchain is an open, distributed register that can be used to record transactions between two parties in a way that is verifiable and permanent. To enable a block to be used as a distributed register, it is managed by a peer-to-peer network that collectively adheres to a new block validation protocol. Once the data is saved in any book, it cannot be changed without changing all the other blocks. Therefore, blockchains are design-protected and also act as an example of a distributed computing system.

The history of cryptography

David Chaum, an American cryptographer, discovered anonymous cryptographic electronic money called ecash. This happened in 1983. In 1995, David implemented it through Digicash. Digicash was an early form of cryptographic electronic payment that required user software to retrieve bank notes. It also allows the identification of specific encrypted keys before they are sent to a recipient. This feature allows the digital currency to be untraceable by the government, the issuing bank or a third party.

After intensified efforts in the following years, Bitcoin was created in 2009. It was the first decentralized cryptocurrency and was created by Satoshi Nakamoto, a pseudonym developer. Bitcoin uses SHA-256 as its cryptographic hash function (proof of operation scheme). Since the release of bitcoin, the following cryptocurrencies have been released.

1. Namecoin (April 2011)

2. Litecoin (October 2011)

3. Peercoin

These three coins and many others are called altcoins. The term is used to denote alternatives to bitcoin or simply other cryptocurrencies.

It is also mandatory to note that cryptocurrencies are exchanged over the Internet. This means that their use is mainly outside the banking systems and other government institutions. Cryptocurrency exchanges involve the exchange of cryptocurrency with other assets or other digital currencies. Conventional fiat money is an example of an asset that can be traded in cryptocurrency.

Atomic swaps

They refer to a proposed mechanism in which one cryptocurrency can be exchanged directly with another cryptocurrency. This means that nuclear swaps will not require the participation of a third party in the exchange.

Is blockchain the new backbone of the Internet?

Blockchain Technology is a data infrastructure that is currently the backbone of a new type of Internet that is attracting the Internet business community. Blockchain is an encrypted and decentralized registry that is programmed to record all financial and digital transactions that have value. This platform is used by Bitcoin, a decentralized, peer-to-peer system that has a digital currency known as a cryptocurrency used to pay for goods and services. Bitcoin allows online users to process payments between countries by exchanging bitcoins, which can be purchased in national currencies or can be minted through mathematics, algorithms and cryptography. The blockchain is used to record all these online transactions.

The blockchain is like a distributed database, where spreadsheets with all financial transactions are duplicated in its network of thousands of computers. These networks are designed in such a way that they are automatically updated regularly. Records and transactions on the web are publicly available to anyone on the Internet and are easily verified. The advantage of blockchain technology is that there is no centralized version of duplicate spreadsheets. It is fully automated without human decision making. In addition, it provides the advantage of eliminating intermediaries such as banks, retailers or brokers in any type of financial transaction.

Advantages of blockchain applications:
Thanks to its cryptographic base, it is guaranteed that there will be no malware, hacks, illegal business practices or phishing attacks. With unsurpassed security and an unchanging blockchain program that spreads and duplicates across multiple networks, it has the huge potential to stop a hacker from corrupting data in any way possible.

The introduction of blockchain technology in the financial industry has had a strong impact on database maintenance systems. It has the ability to maintain self-imposed smart contracts that include programmed conditional clauses for participants. Transactions will be successful and funds will only be transferred when the terms of the clauses are met. Such contracts are currently being implemented and are being implemented in decentralized crowdsourcing and voting platforms, where the results are fully transparent and publicly available.

What is Blockchain for the future?
The use of blockchain technology has the potential to revolutionize the field of law. Through the use of smart contracts, blockchain technology has the ability to have smart contracts and blockchain wants to take effect immediately after a person’s death. The executor and the mediator will no longer be needed to execute the wills. This blockchain technology would rather require a lawyer who has the professional skills of a computer programmer.

In addition, this technology would benefit car rental agencies. With the use of smart contracts, agencies can automatically authorize car rentals once payments and customer insurance information have been approved.

This platform can potentially help the online music industry. Musicians often make sales by recording to third-party companies or platforms. Blockchain can be used to eliminate middlemen and provide the artist with more control and ownership of the music, which preserves the large percentage of sales that artists initially lost.

The blockchain platform may also change the accounting based on the audit audit process of the organization. Instead of the company keeping separate records for transactions, blockchain technology can store all transactions in a common register. This will create a system in which all transactions are locked in a blocking system in which it will not be possible to change, defraud or destroy transactions.

In addition, blockchain technology has the potential to change the marketing and advertising industry. First, it will eliminate intermediaries in digital marketing and advertising, creating cost-effectiveness and transparency for organizations. Transparency will make it easier for marketers and advertisers to identify the right target markets. Merchants will no longer need to search for consumer information through various sources. All information will be easily found in the blockchain.

Blockchain technology is a vital and useful asset for online business communities. It can be used to strengthen and strengthen trust and transparency. With this technology, all information is visible to users, so they can track and validate each product and country before proceeding successfully with a verifiable and secure transaction. This leads to an end to data corruption. Traceable transactions will provide an efficient business infrastructure that will significantly reduce costs for all participants in the blockchain. This will lead to an advanced and independent society with transparency, cost-effectiveness, integrity, higher security and no intermediary.

What is a cryptocurrency?

Cryptocurrency (or cryptography) is a controversial digital asset designed to function as a cryptographic medium of exchange to protect your transactions, additional units for monitoring and transferring assets. Crypto values ​​are a type of digital currency, an alternative currency and a virtual currency. Cryptocurrencies use decentralized control instead of a centralized electronic money system and central banks.

Decentralized control of each cryptocurrency works through a blockchain, which is the basis of public transactions, which functions as a distributed record.

Official definition

According to Jan Lanski, crypto seems to be a system that meets four conditions:

• The policy determines whether new cryptocurrency units can be created. If new cryptocurrency units can be designed, the system identifies the circumstances of the source with the ownership of these new units.

• If two different instructions are entered to change the purchase of the same cryptographic units, the system executes at most one of them.

• The system allows transactions to be performed in a way that changes the owner of the cryptographic unit. An extract transaction can only be issued by an entity that proves the current owners of these units.

• The ownership of cryptocurrency units can be shown exclusively cryptographically.


Decentralized cryptography collectively produces the entire system of cryptographic services at a rate determined during the creation of the system and is publicly known. In centralized banking and economic policies, such as the Federal Reserve, administrative committees or governments that control the supply of money by printing fiduciary funds or by requiring additional digital books. In the case of decentralized cryptocurrency, governments or companies cannot produce new units and yet they are not compatible with other companies, banks or organizations that have real estate value. The basic technical system, based on decentralized cryptocurrencies, was created by a group or individual known as Satoshi Nakamoto.

As of May 2018, there were more than 1,800 crypto-transparent specifications. The system of cryptocurrency records, security, integrity and balance is maintained by a community of mutually suspicious parties, called minors, who use their computer to confirm the time of the transaction by adding them to the register under a specific time stamp scheme.

Most cryptocurrencies are designed to gradually reduce the production of this currency by limiting the total amount of those coins that will be in circulation. Compared to ordinary currencies held or maintained by financial institutions

money in hand, police may find it harder to catch cryptocurrency. This problem comes from the exploitation of cryptographic technologies.

How cryptocurrency works

Simply put, cryptocurrencies are digital money that are designed to be secure and anonymous in some cases. It is closely linked to the Internet, which uses cryptography, which is essentially a process in which readable information is converted into code that cannot be broken down to record all transfers and purchases made.

Cryptography has a history dating back to World War II, when there was a need to communicate in the most secure way. Since then, an evolution of the same has taken place and it has become digital today, where various elements of computer science and mathematical theory are used to provide communications, money and information online.

The first cryptocurrency

The first cryptocurrency was introduced in 2009 and is still well known around the world. Many more cryptocurrencies have been introduced in the last few years and today you can find so many available on the internet.

How they work

This type of digital currency uses technology that is decentralized to allow different users to make secure payments as well as save money without necessarily using a name or even going through a financial institution. They are managed mainly on a blockchain. Blockchain is a public book that is distributed publicly.

Cryptocurrency units are usually created using a process called digging. This usually involves the use of a computer power supply. Doing so solves mathematical problems that can be very complex in generating coins. Consumers are only allowed to buy currencies from brokers and then store them in cryptocurrencies, where they can spend them with great ease.

Cryptocurrencies and the application of blockchain technology are still in their infancy when it comes to financial thinking. More applications may appear in the future, as it is not known what else will be invented. The future of transactions in stocks, bonds and other types of financial assets can very well be traded with the help of cryptocurrency and blockchain technology in the future.

Why use cryptocurrency?

One of the main features of these currencies is the fact that they are secure and offer a level of anonymity that you may not get anywhere else. There is no way a transaction can be canceled or forged. This is the biggest reason why you should consider using them.

The fees charged for this type of currency are also quite low and this makes it a very reliable option compared to the conventional currency. Because they are decentralized by nature, they can be accessed by anyone, unlike banks, where accounts are opened only with permission.

Cryptocurrency markets offer a whole new form of money and sometimes the rewards can be great. You can make a very small investment just to find that it has turned into something great in a very short period of time. However, it is important to note that the market can also be volatile and there are risks associated with the purchase.

Getting started with Crypto

Investing in the cryptocurrency market space can be a bit daunting for the traditional investor, as investing directly in cryptocurrency (CC) requires the use of new tools and the adoption of some new concepts. So, if you decide to dip your toes in this market, you will want to have a very good idea of ​​what to do and what to expect.

Buying and selling CC requires you to choose an exchange that trades in the products you want to buy and sell, be it bitcoin, lightcoin or one of over 1300 other tokens in the game. In previous editions we have briefly described the products and services offered on several exchanges to give you an idea of ​​the various proposals. There are many exchanges to choose from and they all do things their own way. Look for the things that are important to you, for example:

– Deposit policies, methods and costs for each method

– Withdrawal policies and costs

– With which fiat currencies do they work for deposits and withdrawals

– Products they deal with, such as crypto coins, gold, silver, etc.

– Transaction costs

– Where is this exchange? (USA / United Kingdom / South Korea / Japan …)

Be prepared for the Exchange setup procedure to be detailed and lengthy, as exchanges usually want to know a lot about you. This is similar to creating a new bank account, as exchanges are value brokers and they want to make sure that you are who you pretend to be and that you are a reliable person to work with. It seems that “trust” is gained over time, as exchanges usually only allow small amounts of investment to start with.

Your Exchange will keep your CC in storage for you. Many offer “cold storage”, which simply means that your coins are stored “offline” until you indicate that you want to do something with them. There is a lot of news about hacking Exchanges and a lot of stolen coins. Think about the fact that your coins are in something like a bank account on the stock exchange, but remember that your coins are only digital and that all blockchain transactions are irreversible. Unlike your bank, these exchanges do not have deposit insurance, so keep in mind that hackers are always trying their best to get to your cryptocurrencies and steal them. Exchanges usually offer password-protected accounts, and many offer two-factor authorization schemes – something you should seriously consider to protect your account from hackers.

Given that hackers like to rob exchanges and your account, we always recommend that you use a digital wallet for your coins. It is relatively easy to move coins between your Exchange account and your wallet. Remember to choose a wallet that handles all the coins you want to buy and sell. Your wallet is also the device you use to “spend” your coins with merchants who accept CC for payment. Both types of wallets are “hot” and “cold”. Hot wallets are very easy to use, but leave your coins on the Internet, but only on your computer and not on the Exchange server. Cold wallets use offline storage media, such as dedicated hardware memories and simple paper printouts. Using a cold wallet makes transactions more complicated, but they are the safest.

Your wallet contains a “private” key that allows all the transactions you want to initiate. You also have a “public” key that is shared online so that all users can identify your account when they engage in a transaction with you. When hackers get your private key, they can move your coins wherever they want, and that’s irreversible.

Despite all the challenges and wild instability, we are confident that core blockchain technology is changing the game and revolutionizing the way transactions are done in the future.