How cryptocurrencies work.
Like with any investment, it’s critical to understand what you’re investing in. Cryptocurrencies are extremely confusing when you dig past the surface-level explanation and look at how they actually work. Although it isn’t necessary to understand all of the technical jargon, you should know how they work so you can understand their value.
There are thousands of cryptocurrencies with distinct differences, but almost all of them have one thing in common: blockchain technology.
“Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT)” – Euromoney.