How Cryptocurrency Works?

Cryptocurrency, usually referred to as “Digital Currency” would not be expected to operate just the same as Fiat(normal currency). There are methods of operations unique to it.

The most basic way to describe how Cryptocurrency operates would be a Register or Ledger. In that, every transaction is logged and verified. This is made possible through the means of a public ledger identified as Blockchain.

The Blockchain keeps track of all transactions made and updated in real-time. So each time a cryptocurrency unit is purchased, this is logged and verified by “miners”, and this applies to further transactions made.

As much as the identity of the user is mostly private, all transactions made from most cryptocurrency wallets are well logged into the public ledger (Blockchain).
Essentially, Blockchain is the technological foundation on which cryptocurrency operates.

“Miners”, as mentioned earlier, are specific individuals or “nodes” whose jobs are to verify unconfirmed transactions to add them to the blockchain. Cryptocurrencies like Bitcoin and Ethereum usually take a minimum of three confirmations before a transaction is verified and allowed to take place.

The easiest way to explain this even more clearly would be to take a look at a statement made by Vitalik Buterin, the Creator of Ethereum;
“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the centre. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.”

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