Crypto currency is the latest thing that is most talked about in the world today. Though quite some people know about it, there are still many who do not understand the concept. It was actually invented by the owner of Bitcoin as a side product as he was inventing Bitcoin. In the duration of creating bitcoin, crypto currency was invented that is a form of digital money.
What is Crypto currency?
It is nothing but digital money that uses encryption technique of cryptography, a process in which legible information about money is converted into an unbreakable code and is used to track transactions like transfers and purchases which can be operated independently. Hence, bitcoin is the first cryptocurrency that was created in 2009, used by many but thought be a difficult thing. There is no risk of fraud as you use bitcoin.
How does cryptocurrency work?
In this process, decentralized technology is used to store money or make secure payments without any need to go to the bank. Cryptocurrency uses a public ledger which has the record of all the transactions made and is also held by the currency holder. AS the details are stored on block chain (public ledger), the identities of the owners of coins are encrypted and cryptographic techniques are used for the purpose of record keeping. The system also ensure only the use of coins owned by the user.
When there is a transaction done, (a transfer) it gets submitted to the public ledger where it waits to be confirmed which usually takes a few minutes. Mining is the process used to confirm the transactions.
Common types of cryptocurrencies
- Bitcoin: It was the first one to be developed and introduced; it is also the most used one.
- Ripple: Used by banks like UBS and Santander, it was developed in 2012. It can in fact track many more transactions.
- Ethereum: The second popular cryptocurrency developed in 2015, it is also a currency token that is used in the blockchain.
- Litecoin: Similar to bitcoin, but is much faster in payments and has quick process to allow many transactions.
- There is no fraud possible through cryptocurrency.
- Transactions are secure and there is no chance of being anonymous.
- There is less fees as compared to transactions at a bank which makes this way more reliable
4. Being a decentralized system, it is available to everyone.