Cryptocurrency – Definition, Process, Important Names – Banking Awareness

Hello and welcome to exampundit. As a part of our Banking Awareness series, today we are sharing Cryptocurrencies. We are listing down Important cryptocurrencies with the definition and process.

What are Cryptocurrencies?

Crypto is a word derived from Cryptography which is the study of writing and solving codes.

Cryptocurrencies are the currencies encrypted or encoded through cryptography. In other words, it is a digital currency in which encryption techniques are used to regulate the generation of units of currencies.

How is Cryptocurrency different from a normal currency?

The following unique features of cryptocurrency makes is different from a normal currency:-

• It is crypto graphed unlike any of the paper currency we use.
• It is not issued by any Government or central authority but instead is regulated by a complex network called ‘Blockchains’.
• There is no government intervention in the valuation or regulation of the value of a cryptocurrency.
• It does not involve any physical movement of the currency transferred from one place to another.
• These are highly secured. The database concerning the cryptocurrency cannot be easily changed or hacked.

How does a transaction in cryptocurrency takes place?

A cryptocurrency is created by miners. The whole process of how it works can be understood by the following diagram:-

Click Here for inforgraphic image – How it works

Only a minor has the authority to validate a transaction. A transaction until verified can be forged. After being confirmed by a minor it becomes a part of the block chain and cannot be reversed or forged.

Who created cryptocurrencies?

The first ever cryptocurrency – BITCOIN – was founded/invented by the group or individual named as Satoshi Nakamoto in 2008 and introduced to the world in 2009.

Mostly the cryptocurrencies are written in C++ Language.

Petro launched by Venezuela. First cryptocurrency backed by Venezuela’s reserves of oil.

KodakCoin – by Kodak & Wenn Digital – KodakCoin is a “photographer-centric” blockchain cryptocurrency used for payments for licensing photographs.

List of Important Cryptocurrencies