Cryptocurrency. Definition and Description

Cryptocurrency is any type of currency in digital or virtual form; To protect transactions in cryptocurrency, encryption (cryptography) is used. There is no central authority to issue or regulate cryptocurrencies. A decentralized system is used to record transactions and issue new units.

What is cryptocurrency?

Cryptocurrency is a digital payment system that does not involve banks when verifying transactions. It is a peer-to-peer system that allows anyone, anywhere, to send and receive payments. Cryptocurrency payments exist solely digitally in an online database describing specific transactions. They do not involve transactions with physical money that circulates and can be exchanged in the real world. When transferring funds in cryptocurrency, transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

The term Cryptocurrency has come into use due to the fact that encryption (cryptography) is used to verify transactions: advanced encryption is used to store and transfer cryptocurrency data between wallets and to public registries. The purpose of encryption is to ensure reliability and security.

The first cryptocurrency was Bitcoin, created in 2009 and the most famous today. Trading cryptocurrencies is interesting from the point of view of making a profit; As a result of speculative actions, price jumps for cryptocurrencies are periodically observed.

How is cryptocurrency used?

Cryptocurrencies are processed in a distributed public ledger - a blockchain, where records of all transactions are stored, updated by currency holders.

Cryptocurrency units (coins) are created through the mining process. This is a process in which a computer's processing power is used to solve complex mathematical problems, resulting in the generation of coins. Users can also buy currency from brokers and then store and spend it using crypto wallets.

Cryptocurrency is not a tangible object, it is a key that allows a record or unit of measurement to be moved from one person to another without a trusted third party.

Bitcoin has been around since 2009, but financially, cryptocurrencies and the application of blockchain technology are still in their infancy; Their rapid development is expected in the future. In the future, cryptocurrencies can be used in trading transactions with stocks, 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 to be a pseudonym for a person or group of people, and the exact identity of the developer remains unknown.

Ethereum

The Ethereum blockchain platform was developed in 2015. It has its own cryptocurrency Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin.

Litecoin

This currency is most similar to Bitcoin, but has faster innovations such as faster payments and processes that allow for more transactions.

Ripple

Ripple is a distributed ledger system founded in 2012. Ripple can be used to track various types of transactions, not just cryptocurrencies. The company behind the Ripple platform has worked with various banks and financial institutions.

Cryptocurrencies other than Bitcoin are collectively referred to as “altcoins” to distinguish them from the original.#BTC #binance #ETH #litecoin