How does Cryptocurrency Work?

Question

Being someone who is interested to become an investor in cryptocurrency, and knowing the fact that these are not backed by central authorities, I would like to know, how does the cryptocurrency market work?

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James Hopkin 4 years 1 Answer 5616 views 29

Answer ( 1 )

  1. Summary: Cryptocurrency is a digital asset that works as a medium of exchange that uses cryptography to secure financial transactions, controls the additional unit creation and verify the transfer of assets.

    Cryptocurrency is a type of encrypted, decentralised digital medium of exchange, that isn’t issued by the central authorities. Here, individual coin ownership records are stored in a digital ledger or computerized database using strong cryptography to secure transaction record entries, to control the creation of additional digital coin records, and to verify the transfer of coin ownership. It works by transferring the currency between peers, that is confirmed in public ledger via process called mining.

    All confirmed transactions from the start of a cryptocurrency’s creation is stored in public ledger and mining is the process by which the transactions are confirmed and added to the public ledger. Once the transaction is submitted to the public ledger, it awaits confirmation by way of mining, before adding them to the public ledger.

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