Technology is getting advanced day by day. It has totally changed the way people work, communicate and even shop online or offline. Brands and consumers prefer digital modes of payment more rather than traditional cash transactions. This behavior of consumers is giving rise to new technology like contactless payment just like, Apple pay or via NFC enables cards. With the huge rise in smartphone demand consumers now can also pay for goods via mobile app. New payment systems are emerging, banks are also adopting digital modes now, such a cryptocurrency and smart contracts. Today, we will be covering more about cryptocurrency, let's keep the smart contract for some other day.
With the word cryptocurrency, the very first word that came into anyone's mind is Bitcoin. It was the first cryptocurrency and implementation of blockchain technology. But as the cryptocurrency spread just like wildfire. It became one of the growing industries. There are more than 2000 different types of tokens and cryptocurrencies are developed every day. Everyone just heard the word cryptocurrency but doesn’t fully understand, what is it, how it really works, or is it safe enough?
What Is Cryptocurrency?
To begin with, it got its name because here we use encryption to verify transactions. It is a digital payment system that doesn’t rely on banks or any financial institutions to verify transactions. It is a peer-to-peer system that can enable anyone from anywhere to send and receive payments. Instead of being physical money that is carried out in any transaction. Cryptocurrency transactions are purely carried out as digital entries to an online database that describes the specific transaction. When some make any transaction, that transaction is recorded in a public ledger.
Cryptocurrency can be stored in a digital wallet. Advance coding is used in storing and transmitting currency or cryptographic data between the wallets and to the public ledger. The encryption is done to provide security and safety of that public ledger.
How Secure Is Cryptocurrency?
Cryptocurrencies are built using blockchain technology. Blockchain basically describes, how a transaction is recorded in the form of "Blocks" along with the timestamp of that transaction. It's a fairly complex, technical process, the result of cryptocurrency block is a digital ledger that's hard for hackers to tamper with. Also to carry out the transaction, a user need to enter the receiver's digital wallet address. All the cryptocurrency transactions are irreversible. This does not ensure that cryptocurrencies are not hackable. "Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million in 2018. That made them two of the biggest cryptocurrency hacks of 2018." The largest hack so far -Investopedia.
That's all for today. If you find something interesting about cryptocurrency or blockchain technology then comment down below. We will be happy to know your thought.