Cryptocurrencies can be used to buy things, but they’re purely digital.
The most popular cryptocurrency is called Bitcoin, but there are others as well. Some believe that this is the future of money.
How does cryptocurrency work?
Normal money, like the British and US dollar, is controlled by governments; cryptocurrencies aren’t. Instead, they are kept in a ledger (a kind of big, electronic exercise book). This ledger is known as a blockchain.
BLOCKCHAIN:
It is a place where all the records and tracking of money took place. Its also used to track the assets in a business network.
Anything virtual of some value can be tracked and traded using Blockchain, reducing the cost of things involved in this process.
It can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital to an online database. When you transfer cryptocurrency money, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
People like to use cryptocurrency because it isn’t run by one country or person, cryptocurrency can be used around the world. There aren’t many costs in using it, and you use it anywhere you can get the internet. Also, some cryptocurrencies, including Bitcoin, have gone up in value, which has made early users rich.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, and then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is the thing that allows you to transfer the currency from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still enhancing, and more uses are expected in the future.
Transactions including bonds, stocks, and other financial assets could eventually be traded using this technology.
