Introduction to cryptocurrencies**
Cryptocurrencies are digital currencies that use cryptography to secure transactions and manage the issuance of currencies. It relies on blockchain technology, which records transactions practically and securely.
**How cryptocurrencies work**
1. **Blockchain**:
Blockchain is a public and decentralized record of all transactions made with cryptocurrency.
- Each transaction represents a transfer or exchange of currency and is recorded within a block that connects to previous blocks.
2. **Cryptography**:
Cryptocurrencies use encryption techniques to secure transactions and protect data.
- Public and private keys are used to verify the identity of the sender and recipient and secure transactions.
3. **Mining**:
Mining is the process of securing the blockchain network and documenting transactions.
Miners use their computer power to solve complex mathematical puzzles to add new blocks to the blockchain and receive a cryptocurrency reward.
4. **Wallets**:
Wallets are used to store and manage cryptocurrencies.
- Wallets can be in the form of software, hardware or paper, and allow access to the balance and conduct transactions.
**In conclusion**
Cryptocurrencies offer a new, decentralized financial system that allows individuals to transact freely and without intermediaries. As technology continues to evolve, it is expected that cryptocurrencies will continue to change the way...