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CRYPTOCURRENCY BASICS

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Whenever you visit our website, you will find some good information on CRYPTOCURRENCY BASICS. It is possible that you heard about bitcoin long before you heard about cryptocurrencies. That is fine since you have an idea of what would be talking about in this article. Cryptocurrencies are digital currencies or virtual currencies. Digital money is not physical and only in changeable figures designating ownership of a certain amount of information provided and stored in a database. Cryptocurrency is a kind of digital money with unique and innovative differences that puts it apart from other kinds of money.

Cryptocurrency is a mathematically secured virtual made to serve exchange purposes. Cryptocurrency transaction is possible through a special branch of mathematics known as cryptography this ensures verification of transactions, and regulate the creation of new cryptocurrencies. The blockchain is the underlying technology cryptocurrency works on, and cryptocurrency network controls the blockchain activities. This is how it really happens. The blockchain is a ledger of transactions such as the real ledger you find in an accountants office. Unlike the physical ledger, however, the blockchain continually updates itself using information provided by a peer-to-peer network. The transactions in a blockchain are decentralized, and everyone on in the network sees all the transactions that take place in the network. Everyone can also write on this ledger so that it appears on everyone else’s page. When a new page is exhausted, miners add another page to the network. Every page is known as a block and each block has the hash function of the previous block in what is technically known as the proof of work.

The hash function makes it impossible for miners to add a new block to the network except they provide the answer to a random puzzle. The only way to solve the puzzle is by trying all possible combinations until they get the correct answer.

We can use bitcoin as an example to understand how the hash function works to secure the network. Every transaction in the bitcoin network is recorded but pending verification of these transactions, they are left in a pool of unconfirmed transactions. After solving a new block miners send it to computers in the network. This is a suggestion of what a new block should be. Each block contains transactions done at the same time. The hash function links a new block to the previous block, and any change in the block changes the hash function too. This makes it impossible to send the same bitcoin to different persons since spent transactions cannot be included in a block for confirmation.

Cryptocurrencies are stored on wallets and every cryptocurrency has its value that is determined by market forces of demand and supply. Bitcoin, for example, reached a historic high of $20,000 per BTC in December 2017. Cryptocurrencies are stored in wallets. A wallet is a secured space where users can access their cryptocurrency by providing a unique private key that matches the public key. The public key is the space where received coins are stored in the network. You can start using cryptocurrency today by simply signing up for a wallet or exchange service.

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