A blockchain is a digital ledger of all cryptocurrency transactions. It is constantly growing as "completed" blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Cryptocurrency is a digital or virtual currency that uses cryptography for security. A defining feature of a cryptocurrency, and arguably its biggest allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
Bitcoin, the first and most well-known cryptocurrency, was created in 2009 by an anonymous person or group known as Satoshi Nakamoto. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin and other cryptocurrencies are created through a process called mining. Miners verify and record transactions in a public ledger called a blockchain.
Cryptocurrency transactions are verified by a process called mining. Miners verify and record transactions in a public ledger called a blockchain. In return for their work, miners are rewarded with cryptocurrency.
The most well-known cryptocurrency is Bitcoin, but there are many others, such as Ethereum, Litecoin, and Monero. Cryptocurrencies are often traded on decentralized exchanges.
Blockchain and cryptocurrency offer a number of potential benefits, including:
Blockchain and cryptocurrency also come with a number of potential risks, including:
Blockchain and cryptocurrency offer a number of potential benefits and risks. Investors should carefully consider all of the risks before investing in cryptocurrency.