What Cryptocurrency is and how it actually works
The Umojivity Team Sep 26
In this crypto short-card-series, we'll explain what cryptocurrency is and why it's gotten so many people excited and looked at as the potential future of finance.
Cryptocurrency at its core is typically decentralized digital money invented to be used over the internet.
Cryptocurrencies are ordinarily not issued or controlled by any government or other central authority such as a bank. They're managed by peer-to-peer networks of computers running free, open-source software. Generally, anyone who wants to participate can.
The reason it's called cryptocurrency is that it is secured by cryptography, where transaction data is recorded on blocks as hashes. A cryptocurrency blockchain is similar to a bank's balance sheet or ledger. Unlike a bank's ledger, a crypto blockchain is distributed across participants of the digital currency's entire network.
Each currency has its own blockchain, an ongoing, constantly re-verified record of every transaction ever made using that currency. A blockchain is a relatively recent technology made possible through decades of computer science and mathematical innovations.
Crypto makes it possible to transfer value online without the need for a middleman like a bank or payment processor, allowing value to transfer almost anywhere, near-instantly, 24/7.
Since a cryptocurrency is decentralized, no company, country, or third party is in control of it, and anyone can participate.
Wait a minute. If a bank or government isn't involved, how is crypto secure? It's secure because all transactions are vetted by the blockchain.
And this brings us to the end of our introductory to cryptocurrency. Check out part 2 in Cryptocurrency key concepts.