New Delhi | Aalok Sensharma: Cryptocurrencies have become hot cakes across the world, especially since the outbreak of the COVID-19 pandemic, with many investors showing interest in them. Several countries are also mulling launching their own cryptocurrency and making them a legal tender, while others like China have imposed a complete ban on them.
Several experts have also favoured a ban on cryptocurrencies while many feel that governments across the world should impose some kind of restrictions on them. Amid this ongoing debate, several people are still unaware of what is a cryptocurrency and how it works. So, we at English Jagran have decided to make our readers aware of cryptocurrencies and everything they need to know about them.
What is a cryptocurrency?
Also known as crypto, a cryptocurrency is a digital or virtual currency that acts as a medium of exchange through a computer network. A cryptocurrency, which is secured by cryptography, is not reliant on a bank or a government of a country.
A cryptocurrency, which cannot be touched, is deposited in an online wallet, which is known as a digital cash system. This system is based on computer algorithms, and thus a cryptocurrency is not limited to the border of a country.
How does cryptocurrency work?
A cryptocurrency is generated through a process known as 'mining'. Mining is the process by which crypto miners validate a cryptocurrency transaction with help of coding and data, and earn a crypto "as compensation for their work".
Crypto mining is carried out in a decentralised system using a computer. People, irrespective of where they live, can be a part of this decentralised system or recordkeeping that is needed for a transaction. This record, which is available publicly, is known as a 'ledger' or 'blockchain'.
All people who are involved in this network are responsible for "verifying and validating" the transactions and thus it is called a "distributed network". Crypto miners continuously verify these blocks of data and add them to the blockchain.
This is a lengthy and complicated task and miners must guess the correct codes associated with the data to allow other miners on the network to continue this process. It should be noted that the new block contains a link to the previous block.
What are some of the famous cryptocurrencies?
Some of the famous cryptocurrencies that are currently available in the world are Bitcoin, Altcoin, Ethereum, XRP, Tether, Cardano, Polkadot, Stellar, and USD Coin.
Posted By: Subhasish Dutta