Do you know how the world of Cryptocurrencies works?

 Know how the world of Cryptocurrencies works

 

 

 

Cryptocurrencies enter the group of digital, alternative and virtual currencies. They were initially designed to create an alternative payment method for online transactions.

 

 

 

 

 

 

 

 

 

 

However, cryptocurrencies are not yet widely accepted by businesses and consumers and are currently too volatile to function as a means of payment. These are decentralized currencies, developed outside of government influence or control. The cryptocurrency economy is controlled by P2P Internet protocols. The units that make up a cryptocurrency are encrypted data strings that are encoded to represent a unit.

 

 

 

Bitcoin is considered to be the first decentralized cryptocurrency to be traded. Like all cryptocurrencies, it is controlled by a blockchain transaction database that acts as an open ledger to the public. Bitcoin was created by Satoshi Nakamoto. It is not known if that name belongs to a person or group.

 

 

 

One characteristic of most cryptocurrencies is that they are designed to slowly decrease in production. Consequently, the number of coins will be limited. This quality resembles materials such as gold and other precious metals. For example, the number of bitcoins must not exceed 21 million. On the other hand, there are cryptocurrencies, like Ethereum, that work a bit differently.

 

 

 

Ethereum issuance is limited to 18 million units per year, which is 25% of the initial supply. Limiting the number of bitcoins creates scarcity, which helps increase their value, and the price of cryptocurrencies is constantly increasing overall. Some claim that the creator of Bitcoin sought to replicate the situation of precious metals with the cryptocurrency. As a result, mining is getting more and more complicated, as the reward is halved every few years until it eventually hits zero.

 

 

 

 

 

 

 

 

Cryptocurrencies use advanced encryption in many ways. Cryptography has evolved from the need to protect communications in World War II to create easily readable information in the encryption code. Modern cryptography has come a long way since then, and in today's digital world it is mostly based on computer science and mathematical theory. It also results from the science of communication, physics and electrical engineering. There are two main elements of encryption applicable to cryptocurrencies: hash functions and digital companies:

 

 

 

Hash – Hash functions verify data integrity, maintain the blockchain structure, and encode transactions and addresses for personal accounts. They also spawn companion cues that allow you to block mining.

 

 

 

Digital subscriptions: Digital signatures make it easy to prove that you have a unit of encrypted information without revealing the information. In the case of cryptocurrencies, this technology is used to sign monetary transactions. Shows the network that the owner of an account corresponds to the transaction.

 

 

 

Ethereum is one of the relatively new cryptocurrencies as it is released in 2015. It works similar to the bitcoin network; It is possible to send and receive units that represent the value of cryptocurrencies through an open network. These units are called erere, which are used to pay online. However, the main use of Ethereum is the operation of smart contracts and not a mode of payment. Smart contracts are scripts of code that can be implemented on the Ethereum blog chain.

 

 

 

The ETRers limit works slightly differently from Bitcoin. Ethereum issuance is limited to 18 million units per year, which is 25% of the initial supply. Therefore, as the absolute transmission is fixed, the relative inflation falls year after year and the price of Ethereum falls