With the current cryptocurrency run in the digital market, these digital forms of money will keep multiplying. These are not issued by the government but by private systems. Bitcoin was first debuted in 2009, and since then, thousands of cryptocurrencies have come to light.
The financial world has also been attracted to these currencies lately. Daily headlines come from the rapid ups and downs at the Bitcoin prices and the twelve major types of tradable cryptocurrencies.
What Is Cryptocurrency?
Also known as a decentralized money, a cryptocurrency is a form of digital cash that can be stored, processed, or created outside the government or Central Bank.
Cryptocurrency has no physical form, unlike paper money. Secured by cryptography, it’s a set of data made from encoding and decoding the information. That’s the reason it’s called cryptocurrency!
Working Of Cryptocurrency
Cryptocurrencies maintain their record using Blockchain, a transaction log, and an online ledger.
Blockchains make digital records of contracts, transactions, certificates that cannot be deleted or changed but only added with more information. The independent transaction log is much more secure compared to institutional digital accounts or paper records that can be easily hacked.
The platform archives information from both seller and buyer. They record it as a string of numbers or letters or ‘hash’ generated by a complex mathematical function.
Every hash is connected to a hash before. Any unauthorized changes to the ledger will eventually be apparent soon after the alteration of a hash.
After the appropriate number of hashes is reached, the group is then termed as a block. It’s linked with other blocks over the server. That’s why they are called blockchains. After every ten minutes, the blockchains are updated. They are stored on a multitude of servers globally.
The most on types of cryptocurrencies are Bitcoin, Ethereum, Litecoin, and Tether.
