What is Cryptocurrency?
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Let's find out Cryptocurrency meaning, definition in crypto, what is Cryptocurrency, and all other detailed facts.
Cryptocurrencies are utilized in cryptographic technologies. The majority of digital currencies are decentralized networks that are based on a distributed ledger or blockchain technology. Therefore, they are not produced by any central force. Cryptocurrencies can be bought from cryptocurrency exchanges and can be mined as well.
In approximately 1983, the principle of a digital currency secured by cryptography first started existing. This was when David Chaum, an American cryptographer, revealed eCash to the public.
Nevertheless, the very first cryptocurrency that gained the attention of the public was Bitcoin, released in January 2009. In essence, Bitcoin was the inspiration for the rapid growth of the cryptocurrency ecosystem we have today. By November 2021, the total value of all cryptocurrencies in existence had reached over $2.1 trillion.
The main idea behind the creation of Bitcoin was the employment of a distributed ledger - a blockchain of all the possible transactions that have ever happened.
The Bitcoin network is comprised of several independent nodes, all of which opt to join willingly. The usage of blockchain allows Bitcoin to function successfully without the need for a central authority, such as a bank, to implement the regulations.
Bitcoin is controlled and modified through the use of a Proof-of-Work consensus mechanism that is based on cryptographic hash functions. The process assures that no new Bitcoin can be produced without significant effort and that all BTC transactions are precisely and eternally recorded.
Some similar decentralized Proof-of-Work coins are Bitcoin Cash, Litecoin, and Monero. Though, there are also many other types of coins, that are quite different from Bitcoin. Like, for example, Proof-of-Stake coins, such as Tron, Dash, and Tezos. Or, there are other coins that are associated with private blockchains administered by firms for internal purposes and are unavailable to the general public.
Nevertheless, all of these are similar in having the operations of their networks secured by cryptographic algorithms.