Cryptocurrency Works
Blockchain Technology
In most cases, it’s “blockchain” that gives life to any other cryptocurrency. It is a shared ledger where all transactions are recorded across multiple computers to enhance transparency and security. Each block contains a list of transactions and once it is finished it becomes part of the chain in linear sequential order.
Decentralization
Cryptocurrency has a feature known as decentralization. Contrary to conventional banking systems governed by central authorities, cryptocurrencies function on peer-to-peer networks. Thus, this enhances the safety and eliminates middlemen from financial transactions.
Popular Cryptocurrencies
Bitcoin was the first ever created form of cryptocurrency and remains the most widely known and valuable one. Its attraction as “digital gold” lies in its decentralization and limited supply (21 million coins).
Ethereum
The second largest cryptocurrency after bitcoin is Ethereum which brought smart contracts into existence. From this time henceforth, applications could be developed with code automatically executing contract terms.
Ripple
Ripple stands out because it allows fast low-cost international payments; hence it is gaining popularity amongst banks around the world as their cross-border solution.
Mining and Transactions
Cryptocurrency Mining
Mining is the process of creating new cryptocurrency coins and adding transactions to a blockchain. Miners solve complex mathematical problems using powerful computers to validate and secure transactions.
Secure Transactions
Due to cryptography, cryptocurrencies are highly secure during transactions. Transactions have public and private keys that maintain transaction authenticity and confidentiality making it almost impossible for malicious actors to change the system.
