The basics of Cryptocurrency and the Way It Works

[Micheal Jack]

In the times that we're living in, technology has made unbelievable advancement as compared to any time in the past. This advancement has redefined living of man on every aspect. In fact, this advancement is an ongoing process and thus, human life on earth is improving constantly day in and outing. One of the latest inclusions in this aspect is cryptocurrencies.

Cryptocurrency is merely digital currency, which has been designed 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 Stringed.

Little backtrack

Advancement of cryptocurrency is especially assigned to the virtual world of the web and involves the task of altering legible information into a code, which is almost uncrackable. Thus, it becomes much easier to track purchases and transactions concerning the currency. Cryptography, since its introduction in the WWII to secure communication, has evolved in this digital age, joining with statistical concepts and computer science. Thus, it is now used to secure not only communication and information but also money transactions across the virtual web.


A cryptocurrency wallet is nothing else when compared to a software program, which is capable to store both private and public keys. In addition, it can also interact with different blockchains, so that the users can send and receive digital currency and also keep a track on their balance.

That this digital accessories work

In contrast to the standard accessories that we carry in our pockets, digital accessories do not store currency. In fact, the concept of blockchain has been so smartly mixed with cryptocurrency that the currencies never get stored at a particular location. Nor do they exist anywhere in hard cash or physical form. Only the records of your transactions are stored in the blockchain and nothing else.

A real-life example

Suppose, a friend provides you with some digital currency, say in form of bitcoin. What this friend does is he transactions the ownership of the coins to the address of your wallet. Now uniswap, when you want to use that money, you've unlock the fund.

In order to unlock the fund, you need to match the private type in your wallet with the public address that the coins are given to. Only when both these private and public addresses match, your account will be credited and the balance in your wallet will swell. Simultaneously, the balance of the sender of the digital currency will decrease. In transactions related to digital currency, the actual exchange of physical coins never take place at any instance.

Understanding the cryptocurrency address

Of course, it is a public address with a unique sequence of characters. This enables a user or owner of a digital wallet for cryptocurrency from others. Each public address, that is generated, has a matching private address. This automatic match shows or ensures the ownership of a public address. As a more practical analogy, you may look at a public cryptocurrency address as your email address to which others can send emails. The emails are the currency that people send you.