Cryptocurrency has seen quite a rise in the 21st century, this is known to be an internet kind of money which could be used to purchase products and services online, it could also bring its uses outside the internet in making financial transactions. There are several forms of cryptocurrencies and they all leverage the blockchain technology for their transparency, decentralization, and immutability.
A very important feature of cryptocurrency is the fact that it can’t be controlled by any authority, due to its blockchain-based system, this makes this currency immune to government interference as seen in other forms of currencies used today.
A form of transfer of this currency is done digitally with the use of private and public keys with some minimal fee charged for the processing of the transaction which also cut the high processing fees charged by banks today in the processing of high ends transactions
Our world today has seen a great rise in this currency and I will tell you some key things you will need to know about this currency.
How cryptocurrency works?
Just few know that the cyptocurrency project emanated as a side product of an invention by Satoshi Nakamoto. He is known for the invention of bitcoin which we all know today as the leading cryptocurrency, but Satoshi never intended to create a currency.
During his announcement, he declared that he created “Peer-to-Peer Electronic Cash System” which he said was something that failed to be created before the invention of digital cash. This was when he announced the release of Bitcoin which is an electronic cash system that makes use of a peer-to-peer system which helps to prevent spending twice during a transaction and not controlled by any central authority.
The decision to build this decentralized network gave the birth of cryptocurrency. To get digital cash one will need a payment system having accounts, transactions and balances, but major payment methods fail to solve the problem of double-spending which is simply the issue of spending the same amount of money twice which is a foul in the central server.
In the decentralized system, you will not be having the central server, therefore every part of the network will be needed for a transaction. To avoid a double-spending, there must be a consensus between the future balances which is usually done by a central authority.
Hence how can we define cryptocurrency?
Cryptocurrency in simple language is are entries in a database which cannot be changed by anyone without the fulfillment of some certain conditions, there are several things involved in this currency, join me as I introduce mining in the next article.