Blockchain is on everyone’s interest nowadays and cryptocurrencies is one of those. It is difficult to explain the cutting edge technologies with easy words, but it is essential to know this topic because it can completely change someone’s life within the next couple of years. Cryptocurrency makes our life easier, smarter, and clearer.
So, basically, what is a cryptocurrency?
From the word itself you can recognize that it has something to do with cryptography and currency.
Definition of normal currencies are a medium of labor, allowing people to exchange their labor into something that maintains its value and can be exchanged back into goods or services.
As part of it, cryptography is the process of converting normal plain text into inexplicable text and also the other way around. Modern cryptography deals with confidentiality, integrity and authentication. The information cannot be understood, altered, and they must be confirmed by both sender and receiver.
Overall, cryptocurrency is a medium of exchange value just like money we use. The only difference is that it exists in the digital world and relies on encryption, which makes transactions more secure and trackable.
Cryptocurrency could be an alternative form of payment to cash, credit cards, and checks. This technology allows you to send money directly without going through a bank. As the same meaning, cryptocurrencies are like virtual accounting systems. They keep in record of all transactions. The transactions are converted into blocks, which are cryptographically signed and the client doing the signing gets some number of units of virtual currency as a reward for doing the calculation of the cryptographic signature. There are many advantages of using cryptocurrencies. You can transfer money without paying expensive international fees.
The most well-known cryptocurrency is Bitcoin, which made crypto with explosive rise and has become the standard for cryptocurrencies. Besides Bitcoins, there are several other major cryptocurrencies such as Bitcoin Cash, Ethereum, Litecoin, Dash and Ripple.
To sum up, cryptocurrency is a new payment method that ensures the security of all the transactions secure and helps to leave out intermediaries by banks, which in result, contributes to reduction of transaction fees. The main feature of cryptocurrencies, security is provided by Blockchain technology through a network of computers having an identical copy of the database and changing its records by a common agreement based on pure mathematics. Additionally, thanks to one of the main advantages of Blockchain, it is possible to create your own cryptocurrency and issue your own token for industrial use.