Cryptocurrency. Definition and Description

Cryptocurrency is any type of currency in digital or virtual form; cryptocurrency uses encryption (cryptography) to protect transactions. There is no central authority to issue or regulate cryptocurrencies. A decentralized system is used to record transactions and issue new units. What is a cryptocurrency? Cryptocurrency is a digital payment system that does not involve banks in verifying transactions. It is a peer-to-peer system that allows any user anywhere to send and receive payments. Cryptocurrency payments exist solely digitally in an online database describing specific transactions. They do not involve transactions with physical money that has circulation and exchange capabilities in the real world. When funds are transferred in cryptocurrency, the transactions are recorded in a public registry. Cryptocurrency is stored in digital wallets. The term Cryptocurrency came into use because encryption (cryptography) is used to verify transactions: advanced encryption is used to store and transfer cryptocurrency data between wallets and to public registries. The purpose of encryption is to ensure reliability and security. The first cryptocurrency was bitcoin, created in 2009 and the best known to date. Cryptocurrency trading is interesting from the point of view of making profits; as a result of speculative actions, there are periodic spikes in the prices of cryptocurrencies. How is cryptocurrency used? Cryptocurrencies are processed in a distributed public ledger, the blockchain, where records of all transactions are stored and updated by the holders of the currency. Units of cryptocurrency (coins) are created through the process of mining. This is a process in which computer processing power is used to solve complex mathematical problems, resulting in the generation of coins. Users can also buy currency from brokers and then store and spend it using cryptocurrency wallets. Cryptocurrency is not a tangible object, it is a key that allows a record or unit of measurement to be moved from one person to another without a trusted third party. Bitcoin has been around since 2009, but financially, cryptocurrencies and the application of blockchain technology are still in their infancy; they are expected to develop rapidly in the future. In the future, cryptocurrencies can be used in trading transactions of stocks, bonds, and other financial assets. Examples of cryptocurrencies There are thousands of cryptocurrencies in existence. The following are some of the most famous ones: Bitcoin Bitcoin, created in 2009, was the first cryptocurrency and still maintains the highest popularity. The currency was developed by Satoshi Nakamoto - believed to be a pseudonym of a person or group of people, and the exact identity of the developer remains unknown.