What is Cryptocurrency and How does it work? – Types of Digital Coins! – Cryptocurrency Explained

Before going into the the “Cryptocurrency”, lets know “What is “Crypto” & What is “Currency“?

What is Crypto ?

• Crypto is NOT a “Cryptocurrency”. The Term “Crypto” refers to the Cryptography.
• Refers to “Various Encryption Algorithm”
• Crypt is actually an “Hidden Information”

What is Cryptography?

• Science of keeping the information secret & safe by converting plain text into unintended recipients cannot understand.

What is Currency?

Money which is in circulation and we used for exchange.

What is Cryptocurrency:

• Cryptocurrency in other ways called as “Digital Currency”.
• It is secured by “Cryptography”.
• Digital Payment System that doesn’t rely on banks to verify transaction.
• It uses Peer to Peer (P2P) system – that anyone can send & receive payments.

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How does Cryptocurrency works?

• Cryptocurrency works with Blockchain Technology.
• Cryptocurrency are not owned by any one party and are decentralized.
• Transactions are recorded into Blocks & time stamped.
• Uses 2 factor authentication for entering username and password, a user has to enter an authentication code received on their registered mobile number as SMS.

Types of cryptographic technique used:

• Symmetric Key Cryptography.
• Hash Function.
• Public Key Cryptography.

1. Symmetric Key Cryptography: Both Sender & Receiver share a Single Key to Encrypt & Decrypt.
2. Hash Function: No Key is used. A fixed length Hash Value is used. Hash Functions are used by many Operating System to encrypt Passwords.
3. Public Key Cryptography: Public and Private key. Public key is Freely distributed. Private key is Kept secret. Public key is used for Encryption and Private key is used for Decryption.

History of Cryptocurrency – What is the first Crypto coin?

BITCOIN was the First Cryptocurrency, which was invented on year 2008 and it was came to action as started to use from the year 2009.

Bitcoin Founder – Satoshi Nakamoto.

All the Cryptocurrencies are not Bitcoin. Alternative coins for Bitcoins are referred as “Altcoins“.

Types of Crypto coins:

1. Bitcoin
2. Ethereum.
3. Binance Coin.
4. Tether.
5. Cardano.
6. Ripple – XRP.
7. Litecoin.
8. Internet Computer.
9. Dogecoin.
10. Stellar.