Cryptocurrency: What Is It?
A cryptocurrency is a type of digital or virtual currency that uses encryption to protect it from counterfeit or double-spend . Blockchain technology, a distributed ledger enforced by a dispersed network of computers, is the foundation of many cryptocurrency decentralised networks.
A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
Getting to Know Cryptocurrencies
Digital or virtual currency supported by cryptography technologies are known as cryptocurrencies. Without the aid of outside intermediaries, they make it possible to make safe online payments. The term "crypto" refers to the numerous cryptographic methods, such as hashing, public-private key pairings, and elliptical curve encryption, that protect these entries.
Cryptocurrencies can be mined or purchased from cryptocurrency exchanges. Not all e-commerce sites allow purchases using cryptocurrencies. In fact, cryptocurrencies, even popular ones like Bitcoin, are hardly used for retail transactions. However, the skyrocketing value of cryptocurrencies has made them popular as trading instruments. To a limited extent, they are also used for cross-border transfers.
Blockchain
Blockchain technology is essential to the allure and usefulness of Bitcoin and other cryptocurrencies. Blockchain, as its name suggests, is simply a network of interconnected blocks or an electronic ledger. A group of transactions are contained in each block, and each member of the network has independently validated each transaction.
Every new block generated must be verified by each node before being confirmed, making it almost impossible to forge transaction histories.
The contents of the online ledger must be agreed upon by the entire network of an individual node, or computer maintaining a copy of the ledger.
According to experts, blockchain technology can benefit many different businesses, including supply chains, as well as procedures like online voting and crowdfunding. Financial organisations are experimenting with the use of blockchain technology to reduce transaction costs by speeding payment processing, including JPMorgan Chase & Co. (JPM).