What is Crypto Currency?
Cryptocurrency is the name given to fully digital, encrypted, virtual currencies that can be used in barter transactions. It is not decentralized like most traditional currencies or has no equivalent in gold. It is an end-to-end system that allows anyone in any location to send and receive payments.
Instead of physical money being moved and changing hands in the real world, crypto payments only exist as digital entries that identify certain transactions in an online database we call a blockchain. When you transfer cryptocurrencies, transactions are recorded in a public ledger and stored in places called digital wallets.
It gets its name from the use of “crypto” in English to verify transactions. The purpose of encryption is to ensure anonymity, security and safety.
The popularity of cryptocurrencies has increased a lot, especially in the last 5 years. Cryptocurrencies, which have been heard by many today, have attracted a lot of attention from heads of state to trillion-dollar companies.
History of Cryptocurrency
With Bitcoin, which was launched in 2008, the first crypto money emerged and is still the largest, most influential, most known crypto money. Since its debut, other cryptocurrencies such as Bitcoin and Ethereum have offered a digital alternative to money printed by governments.
In this process, alternatives to blockchain technology, which is not only the number of cryptocurrencies, but also the registry used by cryptocurrencies, have emerged.
What are the advantages of Cryptocurrency?
The main difference of cryptocurrencies from normal currencies is that they are decentralized and not tied to an institution. In this way, they are far from the bureaucracy between countries and institutions. Since the existence of restrictive institutions such as these has disappeared, they have the ability to send money 24/7 and internationally, cheaply and without borders.
In addition, they are far from experiencing the problems that economic institutions may experience. Things like the failure of any bank to fail can only happen if the interest in cryptocurrencies is zeroed. Today, while it is possible for the cyber systems of any institution, whether bank or state, to become dysfunctional in an attack, the superior encryption technique and blockchain technology of cryptocurrencies makes it impossible for cryptocurrencies to experience such situations.
How is cryptocurrency produced? What is cryptocurrency mining?
The simplest and first way to obtain crypto money is to buy it through a market, but as an alternative to this, crypto currency mining stands out as another more complex way of making relatively money at the same time. The production of cryptocurrencies is a decentralized system like themselves carried out over.
If we consider Bitcoin and most cryptocurrencies, basically a user needs to analyze a mathematical process called hash algorithm in order to obtain a cryptocurrency. This is necessary for the security and continuity of the decentralized system. Most of the cryptocurrencies have a production limit, so as the amount of crypto money produced increases, the transactions that need to be solved to produce crypto money become more difficult and the crypto money earned in return decreases.
If you have the processing power and internet connection, the mining task can be undertaken without being commissioned by someone.
Questions answered by the blog:
- What is crypto currency?
- When did Cryptocurrencies appear?
- What are the advantages of cryptocurrencies?
- How is cryptocurrency produced?
- What is cryptocurrency mining?
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