What is crypto currency
Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency.[1] Cryptocurrencies are classified as a subset of digital currenciesand are also classified as a subset of alternative currencies.
How Does Cryptocurrency Work?
First, cryptocurrency chooses a base unit and how much that particular unit is worth when compared to other currencies (often, the U.S. dollar is used as a baseline). Some cryptocurrencies are more imaginative than others at this point. They try to represent debt registries, contracts, or the act of currency exchange itself. It can get a little weird, but ultimately the unit in some way relates to the value of other currency, as is true of all currencies in the world.Units of cryptocurrency are then created, typically when a transaction occurs. The units are carefully formed and preserved through algorithmic encryption, then linked together in vast chains of data, where the currency can be tracked and exchanged First, cryptocurrency chooses a base unit and how much that particular unit is worth when compared to other currencies (often, the U.S. dollar is used as a baseline).
Some cryptocurrencies are more imaginative than others at this point. They try to represent debt registries, contracts, or the act of currency exchange itself. It can get a little weird, but ultimately the unit in some way relates to the value of other currency, as is true of all currencies in the world.Units of cryptocurrency are then created, typically when a transaction occurs. The units are carefully formed and preserved through algorithmic encryption, then linked together in vast chains of data, where the currency can be tracked and exchanged.
Differences between “Normal” money and Cryptocurrency,
“Normal” MoneyCrytpo Currency
Run by Governments and Banks Run by US
Centralised D-Centralized
Based on Debt No Debt within the actual currency
Based on Interest No Interest within the actual currency
Fractional Reserve Banking YOU are your own bank
Regulated YOU must regulate your money and do proper investments
High Charges for Certain things Low Charges
Can take days to transfer money NORMALLY is instant
Not backed by anything Regulated by the Blockchain