Cryptocurrency is a kind of digital currency based on cryptography. It is also known as crypto in short form. It was created to serve as a medium of exchange between the two parties without the presence of any third party. To keep this transaction safe and secure blockchain technology system was implemented to develop this term cryptocurrency.
What Is Cryptocurrency?
Cryptocurrency is an algorithmic calculation perform by a cryptographic machine. Here transaction is performed between two 2 computers and the record of this transaction is kept in multiple computers or blocks at a single time.
We cannot touch and feel cryptocurrency physically. But we can use it to pay bills, fees, buying products and services. We can store in our digital wallet similar to our physical wallet.
As we keep depositing our fiat money in the bank in the same way we can store our crypto coin in any exchange for stacking, transaction, remittance, etc. Nobody can trace the exact transaction because the same incident happens among the thousands of computers at the same time.
Whenever we discuss cryptocurrency, many things like mining, trading, how it works, arise in our mind. So, today in this post we will discuss all these terms in simple language.
As the name indicates cryptocurrency mining is a process of solving large complicated mathematical equations. Actually, cryptocurrency transactions require multiple blocks for verifying transactions between two parties.
Any computer that verifies this transaction earns some amount of bitcoin. In this way, verifying transactions between sender and receiver is called cryptocurrency mining.
It is very similar to gold mining process. In this system people dig deep and found gold. Similarly in cryptocurrency computers or machines verify algorithms and earn cryptocurrency reward.
It is a process of buying and selling cryptocurrencies. Most traders buy the cryptocurrency at a low price and sell them at a high price. In this way, they earn cryptocurrency as a profit.
This process is very similar to stock market trading. In stock, market traders buy company shares and sell them for profit. Actually, stock market share grows on company growth. If the company will do good business then the price of shares will go up. But if the company will not make any profit then the share price will go down.
Now in this comparision of cryptocurrency market vs stock market we definetly want to know about cryptocurrency working system. So, let’s see:
How Cryptocurrency Works?
Actually, Bitcoin is the largest coin in the whole crypto market. We can use crypto in the open market as some merchants are accepting these currencies as payment of medium. But it is in very little amount. We can’t consider the working system of crypto by their direct or indirect use.
So, the question is how cryptocurrency works? Actually, cryptocurrency works on a demand and supply system based on live trading volume. Major cryptocurrency exchanges decide the total buyer volume and seller volume on their trading software.
If buyers are buying coins at high price then the rate of coin will go up. otherwise it will go down.
Benefit of Virtual
- No need of third party approval for remittance.
- Super fast transaction speed.
- Low cost transaction.
- Borderless currency.
- No fear of thieves.
- It is global currency.
Cryptocurrency mining is a process of solving mathematical problems and earning cryptocurrency as a reward. Actually cryptocurrency transaction does not require any third-party interference. Cryptocurrency work on blockchain technology. In which the transaction is verified by multiple blocks. If you will try to solve this transaction algorithm then you will get a Crypto reward from the blockchain.
Cryptocurrency works on demand and supply system. If the demand for a form will increase then the price will increase. If the demand of coin will decrease then the price of the coin will decrease.
No, you can’t touch a virtual coin by your hand because it is a kind of digital currency. Nobody can take it in his hand or pocket. These coins are kept in a Crypto wallet.
Bitcoin is the largest and biggest cryptocurrency market.