What is cryptocurrency and how is it used?
Cryptocurrency is any type of currency in digital or virtual form; To protect transactions in cryptocurrency, encryption (cryptography) is used. There is no central body for the production or regulation of cryptocurrencies. To record transactions and release new units, a decentralized system is used.
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What is cryptocurrency?
Cryptocurrency is a digital payment system, when checking transactions in which banks do not participate. This is a system with equal participants, allowing any user who is anywhere, send and receive payments. Cryptocurrency payments exist exclusively in digital form in an online bases describing specific transactions. They do not imply transactions with physical money that have the walking and the possibility of exchange in the real world. When transferring funds in cryptocurrency, transactions are recorded in the public register. Cryptocurrency is stored in digital wallets.
The term cryptocurrency came into use due to the fact that encryption (cryptography) is used to check transactions: for storage and transfer of data on cryptocurrency between wallets and in public registers, expanded coding is used. The purpose of encryption is to ensure reliability and safety.
The first cryptocurrency was Bitcoin, created in 2009 and the most famous today. Cryptocurrency trading is interesting in terms of profit; As a result of speculative actions, cryptocurrency prices are periodically observed.
How is cryptocurrency used?
Cryptocurrencies are processed in a distributed public register - blockchain, where records of all transactions are stored, updated by currency holders.
Units of cryptocurrencies (coins) are created in the process of mining. This process, in which the computing power of the computer is used to solve complex mathematical problems, as a result of which coins are generated. Users can also buy currency from brokers, and then store and spend it using cryptographic wallets.
Cryptocurrency is not a material object, it is a key that allows you to move the recording or unit of measure from one person to another without a trusted third party.
Bitcoin has existed since 2009, but financially cryptocurrency and the use of blockchain technology are still at the stage of formation; In the future, their rapid development is expected. In the future, cryptocurrencies can be used in trade transactions with shares, bonds and other financial assets.
Examples of cryptocurrencies
There are thousands of cryptocurrencies. The most famous of them are listed below:
Bitcoin
Bitcoin, created in 2009, became the first cryptocurrency and still maintains the highest popularity. The currency was developed by Satoshi Nakamoto - it is believed that this is a pseudonym for a person or group of people, and the exact personality of the developer remains unknown.
Ethereum (Ethereum)
The Ethereum blockchain platform was developed in 2015. It has its own cryptocurrency Ether (ETH) or Ethereum. This is the most popular cryptocurrency after Bitcoin.
Litecoin
This currency is most similar to Bitcoin, but innovations are more promptly developing in it, such as quick payments and processes that allow you to make more transactions.
Ripple
Ripple is a distributed register system founded in 2012. Ripple can be used to track various types of transactions, not only cryptocurrency. The Ripple Platform Development company worked with various banks and financial institutions. Cryptocurrencies, different from Bitcoin, are called the general term "altcoins" to distinguish from the original.
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