What are cryptocurrencies?

          What are cryptocurrencies?

  • Explaining cutting-edge technologies with simple words can be challenging.
  • Cryptocurrency is a modern type of a network-based digital asset that is spread through a vast number of computers. Such autonomous systems allow them to operate without the influence of governments and central authorities.
  • It has been stated that Cryptocurrencies are not money. At the same time some claim that it represents the largest global shift in development of currencies.
  • What are cryptocurrencies then? We could call them “digital algorithm based contracts”. Most cryptocurrencies do not have trusted central agents, such as the Central bank. Instead, they rely on distributed ledger technology. Most known example of such technology is called Blockchain. It is used to construct a ledger (effectively a database) that is maintained across a network.
  • What does that mean? To ensure that the same cryptocurrency is not spent twice, each member of this particular network must verify and validate transactions using technologies derived from computing and cryptography. Once a decentralized consensus is achieved among members of the network, the transaction is added to the ledger, which is validated                                                                                
            Example
  • To simplify how block chain transactions take place, compare with any online publishing service (example Financial Times). The Internet enables anyone anywhere in the globe to publish data. Likewise blockchain as there are several public and private entities, even like websites encourage anybody to send information anywhere in the world where they will view the blockchain file without the need for intermediary organizations.
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