Technology

What is Cryptocurrency?

If you are following technology, cryptocurrency is not a new word for you. Cryptocurrency is virtual or digital currency that has a certain monetary value. It is a digital asset that can be used to conduct financial transactions on the internet. Cryptocurrencies are not centrally controlled by a particular organisation or authority, it has decentralized control. They are based on cryptographic technology, normally blockchain technology is used by the majority of coins i.e. cryptocurrencies. Some of the popular cryptocurrencies are Bitcoin (BTC), Etherum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), NEO, IOTA etc. 

Blockchain is the distributed ledger technology that holds all the transaction details across a network. A new block is added permanently to the existing system if any verified transaction is made. Blockchain was introduced by an anonymous individual or group of people with the name Satoshi Nakamoto in 2008 for the public transaction ledger of bitcoin. 

Bitcoin is the first cryptocurrency and it is also the largest cryptocurrency based on market capitalization and amount of data stored on its blockchain. Bitcoin can be generated by the mining process which keeps records consistent by using computers.

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There are few more basic things you need to know in cryptocurrency, wallets, keys and exchanges. Wallets are used to store the cryptocurrencies similar to the physical wallet where we put our money, dollars or Dirhams in it. They are used to store the private and public keys that are necessary for receiving and sending coins. Some of the popular wallets are Ledger, Trezor, Electrum, SoFi, Robinhood, Edge etc. 

Public keys are like the bank account number consisting of a long set of letters and numbers. Public key is required for sending coins in the wallet. Whereas private keys are access keys for controlling your coins in the wallet. It’s more like a security pin which needs to be secretly and securely handled. There are a number of wallets in the market, every wallet can’t hold all cryptocurrencies. You need to pick the wallet supported by the cryptocurrency, some may have its own particular wallet as well.

You must be wondering how we can buy and sell cryptocurrencies, Cryptocurrency Exchanges are the places for it. There are a huge range of exchanges to trade cryptocurrency charging some nominal fee for the service. You might need to pick the exchange as well depending on trading features. Some of the popular cryptocurrency exchanges are Binance, Coinspot, eToro, Bitbuy, Coinbase, Bitstamp etc.

The cryptocurrencies are booming day by day, there are more than 6,000 cryptocurrencies now in the internet. They are being popular in the world due to its speed of transaction completions, its transparency and security. Now some of the coins have very large market capitalization and influencing the whole economy as well. 

Image: Pixabay

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