What do you mean by Cryptocurrency?


A digital form of money or currency is generally called Cryptocurrency. The cryptocurrency is invented to build with rules that support encryptions of all the transactions of an entity in a secure way. These encrypted transactions are further non-possible to be hacked by a person or other.

The distinguishers are highlighted by certain special features of cryptocurrency-

  • It is publicly owned,
  • It is a decentralized form of exchange.

If we talk about the words centralized and decentralized, then a centralized form of exchange is something like the Reserve Bank of India, the central banking authority of India, also the operative of the government of the country.

Cryptocurrency doesn’t have special authorities. If we have a look at the decentralized functioning of cryptocurrency, it makes it more immune to categories like:

  • authorities interference,
  • government control, and
  • bureaucratic manipulation.

Who invented The Idea Of Cryptocurrency?

Satoshi Nakamoto was the person who envisioned the very first cryptocurrency. He got famous with - “the unknown inventor of Bitcoin ''. Among cryptocurrencies, Bitcoin was the first to be invented all over the world.

In 2008, with the announcement of the invention, Satoshi said he developed “A Peer-to-Peer Electronic Cash System”. His vision was to give birth to something that people failed to invent prior to digital cash.

So How Does It Function?

The money that we carry in our bank accounts is managed by the database. It all depends upon How much you have?, How much you’re spending?, and How much you’re receiving? The buying and selling or spending and receiving are noted well into the database.

In simple language, cryptocurrency is a public database. It says rather that only a single entity keeps the money and keeps an eye on checking the transactions of it; there is a public database of the same. In case you make a transaction by paying the money to a person, in this case, anyone on the network can check the transaction.

A transaction is a file that says, “Bob gives X Bitcoin to Alice“ and is signed by Bob‘s private key. It‘s basic public key cryptography, nothing special at all. After signing, a transaction is broadcasted in the network, sent from one peer to every other peer. This is basic p2p-technology. Nothing special at all, again.”

This is overall a simplified version of the cryptocurrency. The entire procedure is handled programmatically.

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