How do cryptocurrencies work
Cryptocurrencies work through a decentralized ledger called a blockchain, which records and verifies transactions made in the currency. When a transaction is made, it is broadcast to the network of computers running the cryptocurrency's software, and each computer then verifies the transaction using complex algorithms. Once a transaction is verified, it is added to the blockchain as a block, becoming part of the permanent, unalterable record of all past transactions. The decentralized nature of the blockchain ensures that no central authority controls the currency, and transactions are processed and verified by users in the network rather than by a bank or other financial institution. Additionally, cryptography is used to secure transactions and control the creation of new units of the currency. The combination of blockchain technology and cryptography makes cryptocurrencies unique and allows them to function as a secure, decentralized alternative to traditional fiat currencies.
Last modified 7mo ago