Finance October 10, 2019 admin No comments

Cryptocurrency is the currency of Bitcoin. Why is it called “digital gold”?

And not only “digital gold”, but also “a new global reserve currency”, “a means of combating the state”, “the largest investment opportunity of our time”, etc. But the most accurate, in my opinion, the definition of this phenomenon is “ digital gold. ” Why? Let’s start from afar…

Cryptocurrency Features

The movement of cryptocurrencies inside the system occurs without the participation of a third party under the P2P protocol. All owners of cryptocurrencies are equal to each other, in whatever country they live and what position in society they do not occupy. Since no one indicates personal data, neither social nor financial status matters. Cryptocurrencies are based on an open decentralized database, or registry book, thanks to blockchain technology. Thus, both a simple worker and a senior manager can buy Bitcoin, perhaps only the number of tokens will different.

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The principle of cryptocurrencies

All cryptocurrencies coinbase pro operate based on the blockchain. This is a huge and open database that is not stored on special servers or hard drives of certain computers, it seems to be divided into blocks. Network participants, that is, owners of crypto wallets, support the system.

The name Blockchain speaks for itself – block and chain, chain. Imagine a huge number of cells in which data is stored. They are called blocks. All cells are interconnected. Communication is carried out using hash sums of the previous block in the subsequent ones. This provides reliable protection for transactions because the information of a single block cannot be changed, for this you will have to crack all the blocks connected in a chain.

What is this crypto prefix? This means that both the first Bitcoin cryptocurrency and its “followers” ​​are based on encryption and cryptographic hash functions. Thus, each member of the chain owns a private key and a public key. A private or private key is used for the personal signature of the transaction participant, transfer of ownership. This is the basis of cryptocurrency transactions. The public or public key is used to verify other people’s transactions on the network. That is, you can buy cryptocurrency secretly, or you can so that others know about it.