What is Cryptocurrency?

Cryptocurrency has gradually gained ground as a world phenomenon, taking global stage as one of the biggest currency systems.

Although it has been known by many people, it remains relatively unknown and geeky by many other people.

People, banks, and many companies are beginning to appreciate this importance of knowledge about cryptocurrency and as such are inculcating it into their daily operations.

US senator, Thomas Carper once quoted that ” Digital currencies have captured the imagination of some, struck fear among others and confused a lot of other”.

Beyond the noise and many press releases, an overwhelming number of people, consultants, developers and corporate organizations are yet to have partial or full understanding about cryptocurrency and how it works. Some are even finding it difficult to understand the basic concepts.

Definition of cryptocurrency

A cryptocurrency is a type of digital currency that uses a system of cryptography for security. It is this security feature that makes cryptocurrency very difficult to be counterfeited.

A very alluring feature of cryptocurrency is its organic nature. The currency is not issued by any central authority or government organization, making it theoretically impossible for its operation to be manipulated by the government.

Basic knowledge for beginners

For the purpose of helping beginners acquaint with some of the basic concepts of cryptocurrency, here is a brief explanation of the most used terminologies in the online currency market.

Public Ledgers: the public ledger is a platform where all confirmed transactions from the start of a cryptocurrency creation are stored. The system makes use of certain cryptographic techniques to ensure a safe method of record keeping as well as to encrypt the details of coin owners.

New transactions can be accessed in the public ledger to ensure that each transaction involves only tokens that are owned by the spender.

Transactions: This is a process of transferring funds between two wallets. When transactions are made from wallets, it uses an encrypted electronic signature to provide a legitimate proof that the transaction is carried out by the real owner.

Mining: simply put, mining can be explained as a process of confirming transactions and enlisting them in the public ledger.

It is the mining process that increases or decreases the value of a coin. The process is also known as proof of work system.

Some of the top cryptocurrency exchange include; Bitcoin, Ripple , Litecoin, Ethereum, Zcash, Dash, (XRP), Monero, etc