![]() It operates using blockchain, which allows Bitcoin to digitally exchange anonymous, heavily encrypted hash codes across a peer-to-peer network. The following is a breakdown of popular cryptocurrencies: Bitcoinīitcoin is a general-purpose cryptocurrency and is a main pioneer in the industry. ![]() These include the internet-popular Dogecoin and Ethereum. While Bitcoin is arguably the best known, many other cryptocurrencies have emerged over the years. There are many different types of cryptocurrency, much in the same way that there are many different fiat currencies issued by global governments. In the case of the popular cryptocurrency Bitcoin, the distributed ledger is what is known as a blockchain, which is a digital system that keeps track of cryptographic hash blocks. Cryptocurrency assets are often stored in a digital wallet that keeps track of the cryptocurrency.Ī decentralized, distributed ledger monitors all cryptocurrency transactions around the world. It is not a physical unit, like a coin or a dollar bill, but rather a mathematical computation. Cryptocurrency is created by solving a piece of a cryptographic hashing algorithm in a long chain. ![]() It is typically not directly managed by a single authority but rather works in a distributed consensus approach.Ĭryptocurrency gains its name from the combination of "cryptography" and "currency." At the heart of all cryptocurrencies is a cryptographic algorithm with complicated encryption. In contrast, cryptocurrency is not issued by any government authority. The U.S dollar, for example, is a fiat currency. Most modern currency is often referred to as "fiat" currency, which is regulated and produced by a government entity. Cryptocurrency is a digital form of currency that uses cryptography to secure the processes involved in generating units, conducting transactions and verifying the exchange of currency ownership.
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