What is Cryptocurrency?
A cryptocurrency is a digital or virtual currency that can be used to buy and sell things. It uses cryptography to secure and confirm transactions and to control how many new units of a certain cryptocurrency can be made. Basically, cryptocurrencies are limited entries in a database that no one can change unless certain conditions are met.
Why would you use cryptocurrency?
Blockchain technology was used to make cryptocurrency. Blockchain is an unchangeable digital ledger that records all transactions and can’t be changed by any one party. This means that once a transaction has been confirmed, it is permanent and cannot be changed by anyone, including the receiver, who could double spend it (i.e., spend the same money twice). Blockchains are good at keeping track of complicated chains of events and data, like all financial transactions, but they’re not good at handling flexible situations where someone might want to make changes when there’s a dispute or disagreement about what happened earlier in the chain of events (e.g., disputes between buyers and sellers).
What do cryptocurrencies do?
Cryptocurrencies use blockchain technology, which is basically a distributed database or public ledger that keeps track of all cryptocurrency transactions between two parties, or more specifically, between their wallet addresses. Every few minutes, new transactions are added to this public ledger in groups called “blocks.” This is done by mining, which is essentially solving complex math problems based on cryptographic keys (more on this later). Once they are added to the blockchain, they can’t be changed or faked. This is because they
are based on cryptography, which makes sure that each transaction is unique and real before it is approved and added to the next block of data in the chain, hence the name “blockchain.”
The new way to do business is with cryptocurrency. It can be used for shopping, fundraising, and much more.
Cryptocurrency is a digital currency that uses encryption to keep transactions safe and keep track of how many new units are made. Bitcoin was the first cryptocurrency. It was made in 2009 by an unknown person who went by the name Satoshi Nakamoto.
Cryptocurrency is better than traditional money in many ways, such as:
Decentralization: There are no central banks or governments that control cryptocurrencies. They are made and run by their users.
Transparency: All transactions can be seen by anyone on a blockchain ledger, so there is no need for third-party verification or auditing.
Faster payments: Cryptocurrencies can be sent between parties anywhere in the world instantly, unlike bank transfers, which can take days to complete.