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A very popular and advanced version in contrast to our traditional system of transactions is cryptocurrency. It is not cash that you can actually see in hand but virtual currency. Money is held in the form of crypto coins online in your account at a crypto exchange. Cryptocurrencies are based on blockchain technology which is considered to be very safe and secure. There is literally no chance for counterfeiting crypto coins.
Key features:
- Cryptography: Cryptocurrency uses a technology called cryptography with its two main elements of hashing and digital signature as security features. The integrity of the data is verified and is encrypted so as to keep it safe. The owners have safe access as they give their digital signature and only they can access the encrypted information.
- Blockchain: This is the technology used and is a decentralized list of cryptos. Each block represents a secure transaction that is stored in chronological order. The records created by this technology are permanent and verifiable and cannot be changed without the consent of the rest of the network.
- Block mining: This is the process by which new blocks are added to the chain. When new coins are produced, they get added to the public ledger. It uses a software to validate the transactions. It is very fast and takes very little time to validate a transaction. Mining does not take place for each coin but a block of coins. If you successfully mine a block you get a reward.
- Security: The digital wallet in which a cryptocurrency like Cardano DEX is held is protected by a private key. Only the owner has access to the coins and this makes it highly secure. So transactions are performed with confidence.
- Decentralized: Most currencies of the world are controlled by a central bank or government which is not the case with cryptocurrencies. The value of the currency does not change in response to any policy of the government. Since it is unaffected by external forces there is no fear of price fluctuations. But it is also highly volatile.
- Speed: The speed at which the transactions can be performed is very high. Many transactions can be processed in a second. The peer-to-peer system of operation and the decentralized nature allow this to be possible. This is called the scalability feature.
- Limited supply: The number of coins that will exist is also determined. This is based on logical-mathematical calculation and this is another main feature that keeps the coins unaffected by inflationary forces.