What Is A Crypto Currency In Simple Words

Cryptocurrency. You’ve definitely heard this term before. And even roughly imagine what it is.

Electronic money? Yes. But the Cryptocurrency cannot be equated to money in Webmoney, Paypal or funds on cards. Currency? Yes. But the cryptocurrency is not regulated by the Central Banks of the countries, and its rate is not directly tied to the economy of any country.

What Is A Crypto Currency

Cryptocurrency is a kind of digital money, which is based on the technology of cryptography, that is, data encryption. It has no physical appearance but exists only in electronic form. Its main features are anonymity, decentralization, and security.

The circulation of crypto-currency inside the system is directly (P2P) – without the participation of a third party. Each of the participants is absolutely equal. No one has privileges, regardless of his social and financial status. At the heart of these virtual money lies the decentralized open database

A Bit Of History

Why would anyone need to create a cryptocurrency? The answer to this question remains open. This is partly explained by the characteristics of the cryptocurrency. Earlier there was no convenient and fast way to carry out anonymous payments with a high level of security. With the advent of Bitcoin and the other crypts, this task was solved.

The official year of birth is the year 2009 when the Bitcoin network began to operate. The father of bitcoin and other cryptographic currencies is Satoshi Nakamoto, a mythologized character or even a group of people. Bitcoin was first published in this name.

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Personality of Satoshi

It is obvious that Satoshi Nakamoto and KO have realized many years of experience of specialists in the field of cryptography and IT-technologies. How many years the development and research were conducted is not known exactly.

But it is known that the very term cryptocurrency was first used in the Forbes story about Bitcoin in 2011. He was so fond of readers and fans of the new virtual currency, which soon began to characterize the entire niche.

How The Crypto-Currency Works

Most cryptocurrency functions and circulate in the block. This is an open, decentralized database, where all transactions are recorded and stored. It does not reside on any particular server or hard drive but is broken down into nodes. Support its active members of the network – ordinary users of full-fledged wallets.

Individual cells with recorded data are blocks. In this case, all the blocks are connected. It turns out a chain (chain) – this is what the name Blockchain is. The connection is established by writing the hash of the previous block to new blocks. Because of this, a separate block is almost impossible to change – for this, it is necessary to “hack” all the blocks in the chain.

The prefix “crypto” is due to the fact that Bitcoin and other currencies use encryption and cryptographic hash functions. So each participant in the network has a private or private key and a public key. Private is used to sign the “letter of transfer of ownership”. This is the basis of all transactions and ensures the transfer of cryptocurrency from one participant to another. A public key is already used to verify other people’s transactions in the blockroom.

How To Use Crypto Currency

To use a cryptocurrency, for example, Bitcoin or ethereum wallet you need to open a purse. This is done by downloading the client to the hard disk, or on the network. A popular variant of the online purse for crypto news is available on the site Best-EthereumWallet.Com.

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