In the times we live in، technology has made incredible progress compared to any time in the past. This evolution has redefined human life in almost every aspect. In fact, this evolution is a continuous process and thus, human life on earth is continuously improving day by day. One of the latest inclusions in this regard is cryptocurrencies.
Cryptocurrency is nothing but digital currency، which is designed to impose security and anonymity in online monetary transactions. It uses cryptographic encryption to generate currency and verify transactions. New coins are created by a process called mining, while transactions are recorded in a public ledger called the Transaction Block Chain.
A bit of a backlog
The evolution of cryptocurrency is mainly attributed to the virtual world of the Internet and involves the procedure of transforming readable information into a code، which is almost unbreakable. Thus، it becomes easier to track purchases and transfers involving currency. Cryptography, since its introduction in World War II to secure communication، has evolved in this digital age، blending with mathematical theories and computer science. Thus، it is now used to ensure not only communication and information, but also the transfer of money through the virtual network.
How to use cryptocurrency?
It is very easy for common people to use this digital currency. Just follow the steps given below:
- You need a digital wallet “of course، to store the currency”.
- Use the wallet to create unique public addresses “this allows you to receive the coin”.
- Use public addresses to transfer funds in or out of the wallet.
A cryptocurrency wallet is nothing but a software program, which is able to store private and public keys. In addition, it can also interact with different blockchains so that users can send and receive digital currency and also keep a track of their balance.
How digital wallets work?
Unlike conventional wallets that we carry in our pockets, digital wallets do not store currency. In fact, the blockchain concept is so cleverly blended with cryptocurrency that coins are never stored in a specific location. Nor do they exist anywhere in cash or physical. Only your transaction data is stored on the blockchain and nothing else.
A real life example
Suppose a friend sends you a digital currency, say in the form of bitcoin. What this friend does is he transfers ownership of the coins to your wallet address. Now، when you want to use that money, you have unlocked the fund.
To unlock the fund, you need to match the private key in your wallet with the public address where the coins are assigned. Only when these private and public addresses match will your account be credited and your wallet balance will increase. Simultaneously, the balance of the sender of the digital currency will decrease. In transactions involving digital currency, the actual exchange of physical currencies never takes place under any circumstances.
Cryptocurrency Address Meaning
By nature, it is a public address with a unique character string. This enables a user or owner of a digital wallet to receive cryptocurrencies from others. Each public address، created، has a matching private address.
This automatic matching verifies or determines the ownership of a public address. As a more practical analogy, you can think of a public cryptocurrency address as your email address, to which others can send emails. Emails are the currency people send you.
Understanding the latest version of technology in the form of cryptocurrency is not difficult. One needs a little interest and spend time on the net to get the basics straight.