investing in crypto

What is cryptocurrency and how does it work?

In today’s article, we will answer the main questions you may have about cryptocurrency. Such as : What is cryptocurrency based on? What is the technology? Is it safe? Who created crypto and more.

what is cryptocurrency

what is cryptocurrency

What is cryptocurrency based on?

Cryptocurrency (or crypto) is an electronic means of payment or digital money that people can use as an investment resource. Crypto technology is based on a distributed ledger system that allows people to transmit value in a digital setting. According to European Union laws, crypto is a full-fledged means of payment exempt from VAT. In addition, it allows both parties secure and instant payments. For this reason and many others, interest in crypto has increased quite a bit in recent years. In present days, some major international banks are outperformed by crypto in terms of market capitalization.

What is the technology?

Its technology includes the following features :

  • Open source – no one owns it and anyone can participate in its use and development.
  • Fast and secure transactions.
  • Electronic money system.
  • Public information about the transactions conducted.
  • Not owned by any party.
  • It is decentralised. This is perhaps its most valuable quality. Crypto is not controlled by a particular bank and is an alternative to conventional money. Because of its decentralization, crypto becomes available for trade to anyone with an internet connection.
what is cryptocurrency technology

what is cryptocurrency technology

Who created cryptocurrency?

Bitcoin, the first decentralized cryptocurrency, was developed in 2009 by a programmer using the alias Satoshi Nakamoto. The project was originally developed by a small group of programmers. It gained popularity for a variety of factors. Such include becoming a widely accepted method of payment, storing comprehensive records of each financial transaction, enabling verifications, and automatically updating user ownership information. What is the most crucial aspect of cryptocurrency for the user, furthermore? It is simple to use, offers quick transfers, and offers a high level of security. There are no geographical limitations, minimal fees, and anonymous user options. As a result, a growing number of new financial techniques are appearing as more and more people come to understand the possibilities of cryptocurrencies and cryptocurrency trading.

Where does the name come from ?

The words “cryptography” and “currency” were combined to form the phrase “cryptocurrency.” In order to safeguard user-to-user transactions, it employs cryptographic methods.