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How does cryptocurrency work?

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  • Harrison Jordan
    replied
    Originally posted by Jude Bond View Post
    Forex is an abbreviation for foreign exchange – a financial market that enables you to get exposure to international currency pairs. Essentially, it’s the market in which one currency is converted into another.

    When trading forex, you’d buy and sell one currency against another at an agreed price. If you’ve ever bought an item from an international online vendor in a currency that’s different to your native tender, you’ve had exposure to forex.

    Crypto is short for cryptocurrency – digital currencies where a record of the transactions is verified and recorded on a decentralised system instead of a centralised or single authority. In other words, it’s a non-physical currency, but it can be used similarly to traditional tender.

    Most cryptocurrencies store their transactions on blockchains to increase transparency. This aids in lowering risk and removing the ‘middle man’ that often results in additional transaction fees.

    Bitcoin was the first cryptocurrency, first outlined in principle by Satoshi Nakamoto in a 2008 paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” Nakamoto described the project as “an electronic payment system based on cryptographic proof instead of trust.”

    That cryptographic proof comes in the form of transactions that are verified and recorded on a blockchain.

    Leave a comment:


  • Lieberman
    replied
    Originally posted by Harrison Jordan View Post
    Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

    Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.

    The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.

    A cryptocurrency is a digital, encrypted, and decentralized medium of exchange. Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a cryptocurrency. Instead, these tasks are broadly distributed among a cryptocurrency’s users via the internet.

    You can use crypto to buy regular goods and services, although most people invest in cryptocurrencies as they would in other assets, like stocks or precious metals. While cryptocurrency is a novel and exciting asset class, purchasing it can be risky as you must take on a fair amount of research to understand how each system works fully.

    Leave a comment:


  • Jude Bond
    replied
    Forex is an abbreviation for foreign exchange – a financial market that enables you to get exposure to international currency pairs. Essentially, it’s the market in which one currency is converted into another.

    When trading forex, you’d buy and sell one currency against another at an agreed price. If you’ve ever bought an item from an international online vendor in a currency that’s different to your native tender, you’ve had exposure to forex.

    Crypto is short for cryptocurrency – digital currencies where a record of the transactions is verified and recorded on a decentralised system instead of a centralised or single authority. In other words, it’s a non-physical currency, but it can be used similarly to traditional tender.

    Most cryptocurrencies store their transactions on blockchains to increase transparency. This aids in lowering risk and removing the ‘middle man’ that often results in additional transaction fees.

    Leave a comment:


  • Harrison Jordan
    replied
    Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

    Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.

    The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.

    Leave a comment:


  • Lieberman
    started a topic How does cryptocurrency work?

    How does cryptocurrency work?

    Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders. Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.

    If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party. Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.

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