A form of encrypted digital currency, a cryptocurrency is created, regulated,and kept secure by a network of computers. Bitcoin was the first example of a cryptocurrency, but there are now several thousand types.
How it works
There are two main features of a cryptocurrency. The first is that it exists only in the form of virtual “coins.” Instead of being generated by a national central bank, it is created digitally by teams of specialists known as “miners,” who use dedicated computer hardware. Encrypted in constantly changing digital codes to reduce the risk of counterfeiting, cryptocurrency can be transferred online between individuals independently of financial or government institutions.
The second feature is that the total amount of a cryptocurrency is capped. Each “coin” created by a “miner” is listed on a virtual public ledger called a “blockchain.” Every coin spent is registered on the same ledger, so unlike currencies generated by central banks, once this cap is reached no more coins can be created. As a result, cryptocurrencies are considered less prone to the pressures of inflation and deflation resulting from political and economic changes that
affect conventional currency.
Conventional currency
and cryptocurrency
The appeal of a cryptocurrency is that it can be used to make direct financial transactions anywhere without requiring
a bank account. Transactions are virtually anonymous, there is no central control from banks or governments, and fees are minimal. Cryptocurrencies differ from national currencies in every way, such as how they are valued, generated, and
controlled, to their storage and transfer.
700+ number of cryptocurrencies available for trading
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