Crypto currency is a digital currency that only exists in a network of computers called the “blockchain” on the Internet. It is a virtual and decentralized currency that exists outside of traditional banking, but through which transactions can be made as with any other currency.
The first and best known Crypto currency is bitcoin, but currently there are several thousand Crypto currencies based on the same technology.
How do Crypto currencies work?
Crypto currencies are a type of digital cash without central supervision, i.e. they are not controlled by any person or institution (e.g. central bank). They work like a peer-to-peer file sharing network (P2P), which means that they are shared by all network users, not stored on just one computer.
The lack of central supervision eliminates the need to entrust control of accounts, balances and transactions to one entity. In other words, transparency is increased and the risk of accounting fraud or errors, e.g. double spending within the system, is reduced.
Newly created Atecs CapitalCrypto currencies, are entered into a database called blockchain. Currencies are created when computers calculate a complex set of algorithms in a process called mining. These algorithms use cryptography to secure transactions and regulate the creation of additional Crypto currency units.
Within the network, each user has a complete record of all transactions, and thus all account balances. Crypto currency exists as a way of showing a financial transaction. The following is the transaction life cycle description.
What is blockchain technology?
All transactions involving Crypto currencies are stored in a digital and decentralized public register called a block chain. Each new transaction is a new “block” in the “chain” of all transactions. The block chain uses distributed ledger technology (DLT), which includes transactions involving digital currencies. Crypto currency users can track any transaction ever made via the block chain, but the identity of the user making the transaction is not disclosed. A copy of the block chain is downloaded to each node of the network, which eliminates the need for a central register.
How to use Crypto currency
Crypto currencies were thought to be an alternative way of making payments and transactions on the Internet, but they are not yet widely used. It is believed that one day Crypto currencies will be (or will not be) widespread, which has been the subject of speculation for several years. In short, investors believe that Crypto currencies will become a means of payment.