What Is Cryptocurrency and How Does It Work?
While cryptocurrency is still a relatively new phenomenon in the UK, it has taken the world by storm. It’s a quickly growing market, with thousands of digital assets already out there and more appearing every day.
Still undecided? Here we share what cryptocurrency is and how it works.
What Is Cryptocurrency?
• Cryptocurrency is a type of digital money.
• It has been designed to be secure and anonymous.
• This type of currency is associated with the internet.
• It is the process of converting legible information into a code that is almost impossible to crack.
• It is used to track purchases and transfers.
Originally cryptography was created through the need of a secure communication process. From this beginning, cryptocurrency has evolved into the digital era. It now has elements of mathematical theory and computer science to secure communications, information and money online.
You are probably familiar the first ever cryptocurrency; Bitcoin, created back in 2009 it is still, currently, the best-known and most used cryptocurrency out there.
Over the last ten years there has been a huge surge in cryptocurrencies with thousands of different types of crypto tokens available.
How Do Cryptocurrencies Work?
Cryptocurrencies work through a decentralised technology. This allows users to make secure payments and store money without needing to use their name or go through a bank. Cryptocurrencies run on a distributed public ledger that is known as a blockchain. A blockchain is a record of all the transactions updated and those crypto tokens held by currency holders.
A unit of cryptocurrency is created through a process known as mining. This involves using computer power as a way of solving complicated maths problems. As the complicated maths problems are solved, the crypto tokens are generated.
Instead of mining for cryptocurrency, users can buy their cryptocurrencies from brokers. They are then able to store their cryptocurrency and spend their crypto tokens using cryptographic wallets.
The future of cryptocurrency looks strong as experts agree that transactions including bonds, stocks and other financial assets could eventually be traded using this technology.
If even a little bit of the information above intrigues you and you want to know more about cryptocurrency or how you can invest in crypto tokens then please contact our team of experts at [email protected] and we can set up a call.