Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.

At least 8,000 other cryptocurrencies have evolved since Bitcoin became the first in 2009.

Cryptocurrencies are digital assets that are created and run on a blockchain.
Bitcoin and ether are two popular cryptocurrencies, but there are many others.
Investing in cryptocurrency can be extremely risky, and the underlying technology is very new.

Understanding how cryptocurrencies work, who creates and controls them, and why you might want to buy cryptocurrencies is important for investors.

While there may be opportunities to build wealth, there’s a lot of risk involved with crypto investing, and you need to be mindful of scams. 

What is cryptocurrency?

Cryptocurrencies are digital assets that you can buy, trade, and use to purchase goods. People and organizations create cryptocurrencies for different reasons, but they generally share a few common characteristics.

How do cryptocurrencies work? 

While there are thousands of cryptocurrencies, many with unique traits, they all tend to work in similar ways. It’s hard to avoid some jargon when discussing cryptos, but the concepts can be relatively easy to understand. 

They use blockchain technology 

A cryptocurrency’s blockchain is a digital record of all the transactions involving that crypto. Copies of the blockchain are stored and maintained by computers around the world. They’re often compared to general ledgers, part of traditional double-entry bookkeeping systems where each transaction leads to a debit and credit in different sections of the books. 

“It works like a general ledger — it’s that simple,” says David Donovan, executive vice president, financial services, at the digital consulting firm

Source:: Business Insider

      

(Visited 2 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *