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Cryptocurrency 💰

Ketan Patil
Information Technology Engineering Student, passionate about Programming and Machine learning.
・2 min read

What is cryptocurrency?

Currency has been an integral part of our lives. Now days everyone is moving towards a digital eco-system, from investment to money transfer, everything is going paperless. newest and most secured addition to digital payment sector is cryptocurrency.

  • Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions which works on blockchain technology.
  • The most important feature of a cryptocurrency is that it is not controlled by any central authority, the decentralized nature of the blockchain makes cryptocurrencies.
  • Cryptocurrencies can be sent directly between two parties via the use of private and public keys. These transfers can be done with minimal processing fees, allowing users to avoid the fees charged by traditional financial institutions.

Types of cryptocurrency

Bitcoin is the most popular cryptocurrency created in 2009 by Satoshi Nakomoto. It used SHA-256 hashing algorithm to hash transactions.
Another popular cryptocurrencies are as follow:

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How it works?

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Consider Alice wants to send bitcoins to Bob.
1.Alice first login into the bitcoin wallet using his unique private key.
2.After successful login Alice sends bitcoins to bob using Bob’s public key
3.Bitcoins sent by Alice then added into Bob's wallet without interference of third party and new block of the transaction is created.
4.This block of transaction contains information about transaction and hash key of previouse block of transaction.
5.This new block of cryptocurrency transaction is then appended to blockchain and gets updated to distributed ledgers.

Why Cryptocurrency?

1.We manage our transactions:
As no other parties involved in transaction of cryptocurrency. This means there’s less opportunity for funds to get diverted elsewhere without your knowing. As a result, this will help reduce and eliminate fraud risk.
2.We can track our payments at any time:
Bank transactions get tracked over the few days. But in case of cryptocurrency we can track transactions by the second. This increases security for both the sender and receiver of the transaction.
3.Transaction costs are affordable:
Cryptocurrencies like Bitcoin usually have low transaction fees compared to other currencies. Bank probably charges a higher transaction fee than Bitcoin. This is because there is no central authority governing these currencies.

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