What Is Crypto Currency And How Does It Work
We all have heard about or at least know someone who used/uses crypto currency, but what exactly is it? So, crypto currency is basically an internet-based medium of exchange /virtual currency which use cryptography to conduct secure and verified transactions for its users. All crypto currencies were developed and necessarily work through block chain technology. The block chain technology assures that all crypto currencies are limited entries in a database that efficiently records transactions between two parties efficiently and in a permanent way. It does not exist physically and isn’t issued by any centralized authority as opposed to central banking systems and or digital currency. Apart from it being a transparent and secure way to carry out financial transactions, another feature that attracts its users towards it is that crypto currencies can be traded between two parties directly via the use of public or private keys, and thus, users can avoid the steep fees charged by most traditional financial institutions.
An
interesting fact about crypto currencies is that they emerged as a side product
of another invention.
Bitcoin is
the most popular and widely used crypto currency of all time, founded by its anonymous
inventor Satoshi Nakamoto and was introduced to the world for usage in 2009.
According to him, he never intended to invent a currency in the first place. He
had intended to develop a “peer-to-peer electronic cash system” to prevent the
problems of double-spending. The most important feature of his invention was
that it was a decentralized server and this was the first time someone had
successfully made it a non-trust-based system after many failed attempts in the
past and this decision became the birth of crypto currency. In a decentralized
network such as bitcoin, every single participant needs to do his job, made
possible with the help of block chain technology.
The working
of it is very simple yet very complex in nature. Here, every transaction
contains the wallet addresses of both parties also known as their public keys
and the number of coins transferred
Every
transaction is broadcasted in the network, but first, it has to be confirmed,
meaning, it first has to be signed by the sender by his private key. All of
this work is hassle-free, and is just basic cryptography. In this network, only
miners can confirm transactions by solving a cryptographic puzzle. Then after
they have stamped the transactions as legit, they broadcast it in the network,
and after it has been approved by every other miner, it gets added to the
database to securely now become a part of the block chain. This is basic p2p
technology. Strong cryptography ensures the consensus-keeping process is
carried out in a secured way.
Crypto
currency is sound money that is secure from political influence and money that
promises to preserve and increase its value over time. Not only is it useful
for purchasing goods online, securely but also an investor's dream come true in
many cases. For example, BTC was valued at around $800 in January 2017 but as
of now, it is valued at around $13500, which shows the huge amount of potential
it holds for an investor. Earlier it used to be a tough job to find a merchant,
seller who accepts crypto currencies as a payment method, but that has
changed drastically over the years. Now owners can use it to pay for hotels,
flights, jewelry, and even college tuition fees. Another usage of bitcoins
would be mining them. Miners are the most important part of this network, and
much like trading, mining is an investment. Miners essentially provide a
bookkeeping service for their respective communities. If someone is willing to
invest in good quality mining hardware, it can be quite profitable and it is
very possible to make a fortune out of it. This, of course, comes at the price
of incurring huge electricity bills and the investment of a good lump sum in
mining hardware.
Today there
are a number of cryptocurrencies available to the daily man other than Bitcoin.
Etherum, Ripple, Bitcoin, Dash are some widely used examples. Although the
legality of various crypto currencies vary from state to state and from nation
to nation, it is undoubtedly one of the most popular, secure, and fruitful
investment opportunity available globally, along with the various other
business opportunities that it opens up for its users. This ever-growing and
ever-evolving network created to facilitate commerce has been a huge success
globally and still has a huge amount of untapped potential waiting to be
discovered.
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The ARTW is a blockchain based Art verification and art trading platform.
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To know more about ARTW visit theartwcoin.com
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