With cryptocurrency knocking on more doors every day, you might have asked yourself: What is cryptocurrency? Today you’ll have that question answered, and who knows, maybe it will interest you enough to try it out for yourself.
Unlike fiat money, which is printed and then kept in physical form, cryptocurrency is exclusively digital. It’s also different from any form of electronic money due to the fact that it is not controlled by a centralized system. That’s right, there’s no central bank, and no central authority to mandate the production and transaction of it. This might seem like it isn’t very secure at first, but if you delve a little deeper into it, you’ll find out that it’s even more secure than the money you have in your wallet right now.
Cryptocurrencies use encryption to secure the transactions and production of themselves. Every transaction or production of cryptocurrency is stored on a public record called the blockchain. You’ve probably heard about the blockchain and you might be wondering what it is exactly. As previously mentioned, it’s an ever-growing list of records which are contained within metaphorical blocks. These blocks cannot be changed at any point in time, and once they’re in place, new blocks can connect to them to form a chain of records. This is how cryptocurrencies achieve their security.
You’ve probably also heard of mining. Crypto mining has become really popular in recent years and has created an incredible demand for tech products in the industry. The process itself is responsible for creating new coins of a cryptocurrency. Miners have to use heavy tech equipment in order to solve complex mathematical puzzles. If they’re successful in solving a puzzle, they are rewarded with a newly formed coin. This is the only way that new coins are produced. Usually, you need pretty high-end specs in order to mine cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. However, some of them, like Monero, can be mined with consumer grade products.
Cryptocurrencies are the way of the future, and soon enough we’ll see them as legitimate options for creating monetary transactions between people, products, and services. Many people have already joined the crypto craze, and if any of this sounds interesting to you, then you should consider joining in on the action.