In the changing times that we’re living in, technology has made unbelievable advancement as compared with any time in past times. This evolution has redefined the life of man on nearly every aspect. In fact, this evolution can be an ongoing process and therefore, human life on earth is improving constantly day in and day out. One of the latest inclusions in this aspect is cryptocurrencies.
Cryptocurrency is only digital currency, which includes been made to impose security and anonymity in online monetary transactions. It uses cryptographic encryption to both generate currency and verify transactions. The new coins are created by a process called mining, whereas the transactions are recorded in a public ledger, to create the Transaction Block Chain.
Little backtrack
Evolution of cryptocurrency is principally attributed to the virtual world of the net and involves the task of transforming legible information into a code, that is almost uncrackable. Thus, it gets easier to track purchases and transfers relating to the currency. Cryptography, since its introduction in the WWII to secure communication, has evolved in this digital age, blending with mathematical theories and computer science. Thus, it is now used to secure not only communication and information but also money transfers over the virtual web.
How to use cryptocurrency
It is very easy for the ordinary people to utilize this digital currency. Just follow the steps given below:
You will need a digital wallet (obviously, to store the currency)
Make use of the wallet to create unique public addresses (this enables you to receive the currency)
Use the public addresses to transfer funds in or out of the wallet
Cryptocurrency wallets
A cryptocurrency wallet is nothing else than a software program, which is capable to store both private and public keys. In addition to that, it can also connect to different blockchains, so that the users can send and receive digital currency and also keep a track on the balance.
What sort of digital wallets work
In contrast to the traditional wallets that we carry in our pockets, digital wallets do not store currency. In fact, the idea of blockchain has been so smartly blended with cryptocurrency that the currencies never get stored at a specific location. Nor do they exist any place in hard cash or physical form. Only the records of your transactions are stored in the blockchain and nothing else.
worldoftechnicalanalysis.com -life example
Suppose, a friend supplies you with some digital currency, say in form of bitcoin. What this friend does is he transfers the ownership of the coins to the address of one’s wallet. Now, when you want to use that money, you’ve unlock the fund.
So as to unlock the fund, you should match the private key in your wallet with the public address that the coins are assigned to. Only once both these private and public addresses match, your account will be credited and the total amount in your wallet will swell. Simultaneously, the total amount of the sender of the digital currency will decrease. In transactions linked to digital currency, the specific exchange of physical coins never happen at any instance.
Understanding the cryptocurrency address
By nature, this can be a public address with a distinctive string of characters. This permits a user or owner of an electronic wallet to get cryptocurrency from others. Each public address, that is generated, includes a matching private address. This automatic match proves or establishes the ownership of a public address. As a far more practical analogy, you may consider a public cryptocurrency address as your email to which others can send emails. The emails are the currency that people send you.