Cryptocurrency is basically a medium of exchange that takes place over the internet and using cryptographical function in order to execute financial transactions. Cryptocurrency is taking leverage on blockchain technology in an effort to gain the following:
- Immutability
- Transparency and
- Decentralization
One of the best features of such is the latter. Meaning, it isn’t governed by any authority. So theoretically, it makes crypto immune to any interference and old ways of the government.
Cryptocurrencies may be directly sent between two parties through public and private keys. These transfers may be done with just minimal processing fees and enabling users to steer clear of the high fee charges by conventional financial institutions.
The Way Crypto Works
Only a handful of people know it but cryptocurrency has been discovered by accident. Satoshi Nakamoto, who is the founder of Bitcoin has never intended in the first place to invent such currency.
In order to realize digital money, you have to create payment network with transaction, balances and accounts. That is so easy to understand. A major issue to which every payment network needs to deal with is preventing the so-called double spending or preventing one entity in spending same amount twice. Oftentimes, this is performed by central server that’s keeping record balances.