Crypto Earn City
What Is Cryptocurrency?
Cryptocurrency is decentralized digital money that’s based on blockchain technology. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 19,000 different cryptocurrencies in circulation.
How Does Cryptocurrency Work?
A cryptocurrency is a decentralized, digital, encrypted medium of exchange. A cryptocurrency, unlike the US dollar or the Euro, has no central authority that manages and maintains its value. Instead, these tasks are distributed widely among cryptocurrency users via the internet.
You can use cryptocurrency to buy everyday goods and services, but most people invest in cryptocurrencies in the same way they would in stocks or precious metals. While cryptocurrency is a novel and exciting asset class, investing in it can be risky because you must conduct extensive research to fully understand how each system works.
Bitcoin was the first cryptocurrency, first outlined in principle by Satoshi Nakamoto in a 2008 paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” Nakamoto described the project as “an electronic payment system based on cryptographic proof instead of trust.”
That cryptographic proof comes in the form of transactions that are verified and recorded on a blockchain.
What Is a Blockchain?
A blockchain is a distributed, open ledger that stores transactions in code. In practice, it’s similar to a checkbook that’s spread across thousands of computers all over the world. Transactions are recorded in “blocks,” which are then connected to a “chain” of previous cryptocurrency transactions.
“Imagine writing down everything you spend money on every day in a book,” says Buchi Okoro, CEO and co-founder of African cryptocurrency exchange Quidax. “Each page is like a block, and the entire book, a collection of pages, is a blockchain.”
Everyone who uses a cryptocurrency has their own copy of this book with a blockchain to create a unified transaction record. Each new transaction is logged as it occurs, and every copy of the blockchain is simultaneously updated with the new information, ensuring that all records are identical and accurate.
To avoid fraud, each transaction is validated using a technique such as proof of work or proof of stake.