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Knowing about cryptocurrency is the need of the hour now. If you know what cryptocurrency is, then it’s great. But, now you should start thinking about investing in cryptocurrency. By the end of this article, you will surely know more about cryptocurrency, the future money, than most other people do.

Where does cryptocurrency come from?

Do you know that Bitcoin came first and then came cryptocurrency? So the inventor of Bitcoin, who a lot of us do not know about, is Satoshi Nakamoto. It was never his intention to come up with a new system of currency when he invented Bitcoin.

All he wanted to do was invent electronic money that has a chain connection by connecting peers. Nakamoto wanted a safe currency system that does not concentrate on a center so that it is difficult to hack or to be stolen. He finally created a digital currency which came to be known as cryptocurrency.

How does Cryptocurrency work?

As difficult as cryptocurrency might seem, it gets only easier with time. The more you read and try to understand its working mechanism, the more you will be interested in it. Let us see how the cryptocurrency network functions.

In the cryptocurrency network, the work is divided among different bodies of the network to avoid centralization and to ensure safety. Every peer in the peer-to-peer network needs to approve of each and every transaction. They also do the background check for every transaction to see that the currency is being spent only once.

This screening process prevents what we know as double spend in cryptocurrency language. This does not allow for any lack of agreement. Even if a single peer disagrees or disapproves of a tiny part of the transaction, the whole transaction is canceled.

This makes sure that the whole network is foolproof. So, confirmation is a vital concept in cryptocurrency. Once a transaction gets confirmed, it cannot be counterfeited and this is why it is so safe.

Pros of cryptocurrency

  • Makes transactions easier
  • Uses keys for top-notch security
  • Very less fee is charged for the transactions
  • Stores information about all transactions
  • Less vulnerable to hacking
  • Can be used for voting later

Cons of cryptocurrency

  • Unidentified nature of the system can be dangerous
  • Hackers can take advantage of cryptocurrency transactions
  • Can be used to avoid tax payment
  • Some experts think it will collapse soon

So basically, cryptocurrencies are nothing but records in a place where all the information is stored. Cryptocurrency gets its name from the cryptographic language it uses to ensure the safety of the whole system. The system does not function on faith but just on calculations where every peer plays an important role to secure and go through all the transactions.

Although not 100% free from threats of hacking or theft, cryptocurrencies still claim to be the money of the coming years with its latest blockchain technology. And, it is only fair that we as a part of the world economy should know what it is all about.