How does cryptocurrency works?

Question

How risky cryptocurrency can be? Do you think crytocurrency is the future? 

Answer 1

• Transactions are sent between peers using software called "cryptocurrency wallets". 
• The person creating the transaction uses the wallet software to transfer balances from one account(AKA a public address) to another.
• To transfer funds, knowledge of a password (AKA a private key) associated with the account is needed.
• Transactions made between peers are encrypted and then broadcast to the cryptocurrency's network and queued up to be added to the public ledger.
• Transactions are then recorded on the public ledger via a process called "mining".
• All users of a given cryptocurrency have access to the ledger if they choose to access it, for example by downloading and running a copy of the software called a "full node" wallet (as opposed to holding their coins in a third party wallet like Coinbase). 
• The transaction amounts are public, but who sent the transaction is encrypted (transactions are pseudo-anonymous).
• Each transaction leads back to a unique set of keys. whoever owns a set of keys, owns the amount of cryptocurrency associated with those keys (just like whoever owns a bank account owns the money in it).
• Many transactions are added to a ledger at once. These "blocks" of transactions are added sequentially by miners. That is why the ledger and the technology behind it are called "block " "chain". It is a "chain" of "blocks" of transactions.

Tips:

       I've just described how Bitcoin works and how many other coins work too. However, some altcoins use unique mechanics. For example, some coins offer fully private transactions and some don't use blockchain at all.

Comments

Do you have any idea about a legit cryto company where we can invest? How many percent do you think its legitimacy? 

Answer 2

Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service.

Answer 3

_{Cryptocurrency works using blockchain technology to create decentralized digital currencies that are secured by cryptography. Transactions are recorded on a public ledger and validated by a network of computers. Cryptocurrency has no physical form and its value is determined by market supply and demand.}

Answer 4

Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Here's how it works:

Transactions are recorded on a decentralized ledger: Cryptocurrency transactions are recorded on a decentralized digital ledger called a blockchain. The blockchain is a public ledger that records all transactions that have ever taken place on the network. Each block in the chain contains a number of transactions, and once a block is added to the chain, the transaction is considered confirmed and cannot be reversed.

Cryptography secures the transactions: Each transaction on the blockchain is secured using cryptography. This means that transactions are verified and confirmed by a network of computers before they are added to the blockchain. Once a transaction is confirmed, it cannot be altered or deleted.

Mining confirms transactions: Cryptocurrency transactions are confirmed by a process called mining. Mining involves solving complex mathematical problems in order to verify transactions and add them to the blockchain. Miners are rewarded with newly created coins for their efforts.

Limited supply of coins: Most cryptocurrencies have a limited supply of coins. For example, Bitcoin has a maximum supply of 21 million coins. This is designed to prevent inflation and ensure that the value of the currency remains stable.

Transactions are anonymous: Cryptocurrency transactions are anonymous, meaning that the identity of the person making the transaction is not revealed. Instead, transactions are identified by a unique public address that is generated for each transaction.

Overall, the decentralized and secure nature of cryptocurrency makes it a popular alternative to traditional fiat currencies. However, its volatile nature and lack of regulation have also made it a controversial topic

Answer 5

Cryptocurrency works by the way it works on the internet. You can buy or sell items with cryptocurrency. Cryptocurrency is not subject to government regulation and can be used in many different ways.

Answer 6

Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger

Answer 7

Cryptocurrency is a form of digital payment that facilitates online transactions for goods and services. Within the realm of cryptocurrency, various companies have introduced their own tokens, representing a digital currency specific to the goods or services they provide. These tokens hold value within the company's ecosystem and can be acquired using real currency. Analogous to arcade tokens or casino chips, users must exchange real currency for cryptocurrency to access the company's products or services. The concept of cryptocurrency has gained popularity as a decentralized and secure method of conducting transactions in the global digital marketplace.