The basics of cryptocurrency and how it works

by admin

By the time we live, technology has made extraordinary progress than anytime in the past. This evolution has redefined human life on almost every aspect. In fact, this evolution is a sustainable process and thus, human life on earth has increased continuously day after day. One of the latest inclusions in this aspect is Cryptocurrency.

Cryptocurrency is just a digital currency, which has been designed to impose security and anonymity in online monetary transactions. It uses cryptographic encryption to produce currencies and verify transactions. New coins are made by a process called mining, while transactions are recorded in public books, called transaction block chains.

Little Backtrack.

Cryptocurrency evolution is mainly associated with the world of virtual web and involves the procedure to convert readable information into code, which can hardly be cut. Thus, it is easier to track purchases and transfers involving currencies. Cryptography, since its introduction in WWII to secure communication, has evolved in this digital era, combining mathematical and computer science theories. Thus, it is now used to secure not only communication and information but also transfers money throughout the virtual web.

How to use Cryptocurrency

It’s easy for ordinary people to use this digital currency. Just follow the steps given below:

You need a digital wallet (obviously, to save the currency)
Take advantage of the wallet to make a unique public address (this allows you to receive currencies)
Use the public address to transfer the funds in or out of the wallet
Cryptocurrency wallet.

Cryptocurrency wallets are nothing but software programs, which are able to store private and public keys. In addition, it can also interact with different blockchains, so users can send and receive digital currencies and also track their balances.

How to work digital wallet works

Unlike the conventional wallet we carry in our bag, digital wallet does not save the currency. In fact, the Blockchain concept has been mixed with cryptocurrency so that the currency has never been stored in a certain location. They are also not anywhere in cash or physical forms. Only your transaction record is stored in Blockchain and nothing else.

Real life example

Suppose, a friend sends you some digital currency, say in the form of bitcoin. What this friend did was that he transferred coin ownership to the address of your wallet. Now, when you want to use the money, you unlock the fund.

To unlock funds, you must match the private key in your wallet with a public address assigned by a coin. Only when this personal and public address is suitable, your account will be credited and the balance in your wallet will swell. Simultaneously, the balance of digital currency senders will decrease. In transactions related to the digital currency, the exact exchange of physical coins never happened to each example.

Understand the Cryptocurrency address

Naturally, this is a public address with a series of unique characters. This allows users or digital wallet owners to accept cryptocurrency from others. Every public address, which is generated, has a suitable personal address. This automatic matching proves or establishes public address ownership. As a more practical analogy, you can consider the public Cryptocurrency address as your email address that can send emails to others. Email is the currency sent by people.

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