What are cryptocurrencies?
Cryptocurrencies are digital assets that also functions as a medium of exchange. Individual asset assignments are recorded in a decentralized database (Distributed Ledger Technology), usually a blockchain. This public financial transaction database uses strong cryptography to verify and secure transactions and possessions and, if necessary, the creation of further coins or the destruction of coins.
Cryptocurrencies enable digital payment transactions without central authorities such as banks. This is done with the help of decentralized data storage and cryptographically encrypted transmission protocols. The ownership of credit is represented by the possession of a cryptological key. The credit, which is also cryptologically signed, is mapped in joint bookkeeping in the form of a distributed ledger technology, usually a blockchain
Cryptocurrencies do not exist in physical form (such as paper money and coins) and are usually not issued by a central authority or control body. Instead stands behind the most cryptocurrencies the desire for a decentralized control, what means that everyone can participate in the issuing of the coins and the administration of them.
What kind of coins are there?
The first and most popular crypto currency is Bitcoin, which was given to us in 2009 by Satoshi Nakamoto. But his name is a pseudonym so nobody really knows who is the inventor of the Bitcoin. Meanwhile there are more than 10000 different which are called Altcoin. The most popular of them are Ethereum, Binance Coin, Ripple, Litecoin, Cardano, Polygon (MATIC), Dogecoin, Polkadot and Tron.
What is a Blockchain?
The validity of the most cryptocurrencies coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
What is mining?
Mining is a process in which computing power is made available to process transactions, secure and synchronize all users in the network. Mining is a kind of decentralized crypto data center with miners all over the world. The miners get rewarded for the used computing power.
