In the times that we’re surviving in, technology has made unbelievable advancement in comparison with any time during the past. This evolution has redefined the life span of man on nearly every aspect. In fact, this evolution is an ongoing process and thus, human life on earth is improving constantly day in and day trip. Among the latest inclusions in this aspect is cryptocurrencies.
Cryptocurrency is nothing but digital currency, which has been made to impose security and anonymity in online monetary transactions. It uses cryptographic encryption to both generate currency and verify transactions. The new coins are created by way of a process called mining, whereas the transactions are recorded in a public ledger, to create the Transaction Block Chain.
Evolution of cryptocurrency is mainly related to the virtual world of the web and involves the task of transforming legible information into a code, which is almost uncrackable. Thus, it gets easier to track purchases and transfers involving the currency. Cryptography, since its introduction in the WWII to secure communication, has evolved in this digital age, blending with mathematical theories and computer science. Thus, it is now used to secure not only communication and information but additionally money transfers across the virtual web.
How to use cryptocurrency
It is very possible for the ordinary people to utilize this digital currency. Just follow the steps given below:
You need a digital wallet (obviously, to store the currency)
Utilize the wallet to generate unique public addresses (this enables you to receive the currency)
Utilize the public addresses to transfer funds in or out from the wallet
A cryptocurrency wallet is nothing else when compared to a software program, which is competent to store both private and public keys. In addition to that, it can also connect to different blockchains, in order that the users can receive and send digital currency and also keep a track on their balance.
The way the digital wallets work
In contrast to the traditional wallets that we carry inside our pockets, digital wallets do not store currency. In fact, the concept of blockchain has been so smartly blended with cryptocurrency that the currencies never get stored at a specific location. Nor do they exist anywhere in hard cash or physical form. Only coincapcentral of your transactions are stored in the blockchain and nothing else.
A real-life example
Suppose, a friend sends you some digital currency, say in type of bitcoin. What this friend does is he transfers the ownership of the coins to the address of your wallet. Now, when you want to use that money, you’ve unlock the fund.
In order to unlock the fund, you have to match the private key in your wallet with the general public address that the coins are assigned to. Only once both these private and public addresses match, your account will be credited and the balance in your wallet will swell. Simultaneously, the balance of the sender of the digital currency will decrease. In transactions related to digital currency, the actual exchange of physical coins never take place at any instance.
Understanding the cryptocurrency address
By nature, it is just a public address with a distinctive string of characters. This enables a user or owner of a digital wallet to receive cryptocurrency from others. Each public address, that is generated, has a matching private address. This automatic match proves or establishes the ownership of a public address. As a more practical analogy, you may look at a public cryptocurrency address as your email to which others can send emails. The emails are the currency that people send you.