How cryptocurrency works


Cryptocurrency can be used as a medium of exchange, just like fiat currency; however, the difference lies in its creation, issue, and governance. Cryptocurrencies are decentralized, meaning it theoretically gives everyone a fair chance of participating in the creation and governance of new money. Secondly, a public ledger is used to keep track of transactions made. This distributed ledger, open to everyone, is called a blockchain; the data recorded on it cannot be deleted or edited unless someone controls more than half of the network’s power. Transactions must be validated by network users before they can be approved, and so cryptocurrencies employ consensus algorithms (Proof-of-Work, in the case of Bitcoin) to prevent double-spend or digital counterfeit money.

There are currently more than 2,000 cryptocurrencies in existence and each has its own set of technologies and terminology. There are several sources one can consult to better one’s understanding of cryptocurrencies and learn how to invest in them, as per the below infographic created by Although cryptocurrencies were primarily created to allow people to make transactions without relying on banks, they are now used as a speculative asset for investment. Cryptocurrency has been referred to as the future of money, and its adoption is growing as more people understand and appreciate it.

You can check out the infographic here

Source of information