The Cryptocurrency Basics
To understand how cryptocurrency works, you'll need to learn a few basic concepts.
All confirmed transactions from the start of a cryptocurrency's creation are stored in a public ledger. The identities of the coin owners are encrypted and the system uses other cryptographic techniques to ensure the legitimacy of record keeping. The ledger ensures that corresponding digital wallets can calculate an accurate spendable balance. Also, new transactions can be checked to ensure that each transaction uses only coins currently owned by the spender.
Bitcoin calls this public ledger a transaction block chain.
A transfer of funds between two digital wallets is called a transaction. That transaction gets submitted to a public ledger and awaits confirmation. When transactions made, wallets use an encrypted electronic signature to provide a mathematical proof that the transaction is coming from the owner of the wallet. The confirmation process takes a bit of time while miners mine. Mining confirms the transactions and adds them to the public ledger.
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