Cryptocurrency is the virtual form of money that can be stored over the internet as it can be accessed only via a computer. The currency is decentralized which means that it does not have any centralized system or a server. Under the process of cryptocurrency, the people operate one on one and there is no use of banks, PayPal, or any other form of the banking system. The parties are dealing with each other directly and the only third party involved in the entire process is cryptocurrency itself. Furthermore, as no other third party like a banking system is involved hence the users are solely in charge of their money and all the transactions that are carried out.
The system of cryptocurrency offers complete protection and security to its users as the system is encrypted which means that users are given codes to access their accounts. The codes are designed in such a manner that it is almost impossible for anyone to hack someone’s account.
The Story behind the Emergence of Cryptocurrency
Coming up with something as unique as virtual money was not easy and neither was it introduced overnight as several factors and aspects were taken into consideration. Everyone agrees on the fact that the internet is indeed a very powerful tool and so did the people who decided to give people control over their money. They are known as cypherpunks and they were in favor of the fact that people should be in charge of the money they have the information they share hence they decided to come up with a system that has digital money. It was not until 2009 that the plan was successfully implemented.
In 2009, Satoshi Nakamoto came up with a first-ever virtual form of money which was completely decentralized and encrypted. It is now known as bitcoin. The creator of bitcoin published a paper in 2018 which explained what bitcoin is and how it is going to operate in the world at large. It was after this document that many people started using it as a base to come up with a different type of cryptocurrency in the near future. You can visit Yuan Pay Group for more information.
Main Components of Cryptocurrencies
There are a few components of cryptocurrency that people need to be aware of and some of the most prominent and important ones are listed below:
Blockchain – Blockchain is very important for the world of cryptocurrency as it is the database under which a complete record of all the transactions is maintained. The technology has numerous blocks and all the information that is stored in this database cannot be changed or modified anytime. Once the information is gathered after the transaction is made, it stays there forever. The information that is entered in the blockchain is stored in a network of computers which is known as nodes. People can add new information but after nodes agree and verify that whatever information is being shared in the blockchain is correct.
Mining – All the transactions that are carried out in the world of cryptocurrency go through the verification process which is known as mining. The process of mining is being controlled by miners and they are given the task to ensure that transactions are carried out in a smooth yet efficient manner. The miners are the ones who derive the relevant information and they ensure that they encrypt it successfully. The process of taking and encrypting the information obtained is known as hashing.
How can we use Cryptocurrency?
People who are not aware of how they can use cryptocurrency in the real world are at the right place right now. There is a lot of difference between cryptocurrency and the regular fiat currency that we used in the real world. The major difference is that unlike the regular currency one cannot hold the cryptocurrency in their hand neither can they carry it in their wallet. The currency can be accessed via blockchain only and people can access their accounts with the help of codes or private keys.
Just like in the regular banking system, people need bank account details to transfer money similarly in the world of cryptocurrency people need the public key to transfer funds into their account. There is a difference between the private key and the public key. The private key is used by the owner of the account to make the transactions whereas the public key is the one that can be shared with others as it can be seen by anyone.
There are many platforms over the internet where the trading of cryptocurrency takes place. Entering the world of cryptocurrency is going to be an exciting experience for you.
