What is Cryptocurrency?
Cryptocurrency is a virtual form of money which cannot exist physically. All the transactions can happen only on the internet. Users will have a wallet in which the crypto coins are stored securely and users can transfer or receive coins through peer to peer mechanism (without any mediator in between). All they transactions are registered on a digital ledger called Blockchain.
Generally, the money related transactions are made through banks acting as mediators between sender and receiver. There is no such system in Cryptocurrency transactions. They follow a Peer to Peer mechanism of protocol.
Cryptocurrency is Decentralized system, which means all the users have complete rights over their data.
The most popular and first cryptocurrency that came into existence is Bitcoin (Know more about Bitcoin here)
But what exactly is the use of cryptocurrency?
The most popular reason is that the transactions are anonymous. We can’t know the personal details of sender or receiver of bitcoins. Only things which are visible to everyone on the block chain are: Public keys, transaction amount and transaction ID.
How do the Cryptocurrencies come into existence ?
All the coins (including Bitcoins / btc or other ALT Coins) are created by Mining. (Check this article for more about Mining)
Sounds confusing? Don’t worry it will be explained in later articles. Just keep gaining the knowledge. Jump to next post.
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