A cryptocurrency is a virtual currency that employs cryptography technology to improve security and privacy. Mostly digital currencies are decentralized networks built with blockchain technology. Blockchain is a digital public ledger where all the digital transactions are verified and recorded. It’s run by a network of computers.
Cryptocurrencies are not controlled or issued by a financial institution. They are completely decentralized and immune to government manipulation or interference. They are hard to counterfeit. Bitcoin is the most popular example of cryptocurrency and blockchain technology. It was Bitcoin that drew world’s attention to the concept of crptocurrency and blockchain.
How Does Crptocurrency Work?
A cryptocurrency has a public ledger (blockchain), where all digital transaction are made public to improve transparency and avoid double spending. The ledger records transactional info in a database, which no one can manipulate or control. Nobody owns the crypto blockhain or the ledger. It’s not run or controlled by any central body or financial institution.
Cryptomining or cryptocurrency mining is a process by which digital transactions for various types of cryptocurrency are validated and recorded in a digital public ledger called blockchain. The individuals taking part in crypto mining are known as cryptocurrency miners who a get fixed portion of money in exchange for their mining efforts. It’s not that a crypto miner itself does the mining.
It’s a specialized mining hardware that they invest in to validate crypto transactions. All they need is to invest in a mining equipment to get started with crypto mining. The reason why more and more people are mining cryptocurrencies is because it’s one of the easiest ways to earn from cryptocurrencies. Unlike trading cryptocurrencies, you don’t need to wait to see your crypto coins go up to earn profit.