Description
Cryptocurrencies are virtual assets that are put into operation by a cryptographic cipher to authenticate ownership and confirm the integrity of transactions, and oversee the establishment of additional units. Therefore, certain persons are prevented from making copies. Cryptocurrencies are not physically available, so they are stored in a virtual wallet.
Functioning
Digital currency has different differentiating characteristics in relation to traditional platforms. Therefore, they are not systematized or monitored by an institution and do not require transaction managers. Cryptocurrencies, in terms of their regulation, do not have a means of payment, since they do not have the support of the central bank and other public authorities. In addition, they are not protected by consumer defense devices such as the Deposit Guarantee Fund or Investor Guarantee. Regarding the operation, digital currencies, it is necessary to highlight that when the transaction is made with cryptocurrencies, when the digital asset is bought or sold, it is not possible to cancel the transaction because the blockchain is a system that does not allow the elimination of data . Therefore, to return a transaction, it must be executed on the contrary.
Types Of Digital Wallets
Digital purses or wallets are software or apps that allow you to store, send, and receive cryptocurrencies. So, compared to a physical wallet, digital wallets or wallets store the keys that give ownership and rights over cryptocurrencies, and allow you to work with them. There are two types of wallets: hot and cold.
• The discrepancy between them is that the former are linked to the Internet, and the cold ones are not. So, in the hot wallets there are web, mobile and desktop wallets, although the last one is when the computer is connected to the internet.
• In cold wallets, there are hardware and paper wallets, which is merely the printing of the personal key on paper. Defense services are not systematized or controlled.
Cryptocurrencies work through a shared ledger or blockchain. Technology provides them with an exalted security system with the capacity to prevent the same digital asset from being transferred twice or being counterfeited. Blockchain technology works like a ledger where colossal sums of information can be recorded and stored. They are shared on the network and protected in such a way that all the data that it protects cannot be altered or deleted.
Determining The Value Of A Cryptocurrency
The value will depend on the function of supply and demand, as well as the commitment of the users. The cost is disclosed in efficient mechanisms that hinder its administration, such as those currently in regulated price markets. There are occasions when the value is formed without the public information that protects them.
Mine Cryptocurrencies
It is a precise process to approve the operations that are made through this type of digital assets. By taking a bitcoin coin: its mining would sign up for confirmation and recognition of trading activities in the blockchain system. In summary, mining cryptocurrencies presumes to successfully solve the mathematical calculations that are presented. The miners who have executed it reach cryptocurrencies in exchange.