How Cryptocurrency works?

 How Cryptocurrency works?

How Cryptocurrency works?


Ledger: Who owns It? & How does It work?

  • A Cryptocurrency has a ledger, where all transactions are made public so that total visibility is provided. Having a ledger forces where everyone can "play fair" and takes away the risk of double spending. 
  • A ledger is an list of entries in a database were nobody can change without fulfilling the specific conditions. No one owns the ledger or a cryptocurrency blockchain
  • It is an decentralized meaning self-ruled and self governed without the interference of any outside parties. 

Verifying Transactions & Blockchain

  • Let's assume that you want to invest in cryptocurrency, there are thousands of cryptocurrency so will use such as Bitcoin through a major cryptocurrency exchange
  • After Bitcoin has been purchased it's time to spend. What will happen now? It means the transaction is unconfirmed, which means that the transaction is not yet official, it goes through a verification process.
  • Once transactions get confirmed it becomes part of a record historical transaction that is housed on the blockchain network. 
  • Cryptocurrency miners verify the transactions and then they add into public ledger. 
  • Cryptocurrency miners use powerful computers to solve complex math calculations that are the key for verification process. 
  • Cryptocurrency is an open source so anyone can confirm the transaction, and the first miner to solve the calculations gets to add a block to their transaction ledger . This process known as "proof of work system". 
  • After the block added to ledger, the miner are rewarded for their efforts, which varies based on the cryptocurrency
  • For example , Bitcoin originally awarded 50 BTCs, but the award halves at present times and today has decreased to 12.5 BTCs. 

How Cryptocurrency works?

How cryptocurrency works?




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