At its core, cryptocurrency is typically decentralized digital money designed to be used over the internet. Cryptocurrency makes it possible to transfer value online without the need for a middleman like a bank or payment processor, allowing value to transfer globally, near-instantly, 24/7, for low fees. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Examples of well-known cryptocurrencies are Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
Read this beginner's guide to learn more.
What is Bitcoin?
Bitcoin, launched in 2008, was the first cryptocurrency and remains by far the biggest, most influential, and best-known. In the decade since, Bitcoin grew as digital alternatives to money issued by governments. Bitcoin is a peer-to-peer currency, which means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.
How does Bitcoin work?
Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is recorded by miners in a continuously extended blockchain and locked in by the consensus of node operators. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.
What is Blockchain?
Simply put, Blockchain is a publicly shared electronic ledger that is immutable. A ledger is a collection of accounts and all their recorded transactions. The key concept behind blockchain technology is the consensual distribution and synchronization of each transaction across all users, making it harder to manipulate recorded transactions.