There is no doubt you’ve heard about cryptocurrency. With wide swings in value, interesting names like Dogecoin or Ethereum, and constant news coverage, how could you not? More than likely, you know people talking about the money they’ve made or how they think cryptocurrency can change the world.
The best way to decipher all this information is to know the basics about what it is, how it works, and what it can mean for the future.
What is Cryptocurrency?
Currently, over 20,000 different cryptocurrencies are in circulation. Each digital currency is built on cryptography and identified by a unique number when traded, and that number and the associated trade get stored on a blockchain digital ledger. The true beauty of this unique number and its storage means counterfeiting and double-spending are almost impossible.
Cryptocurrencies come about either through mining or a bulk creation of the currency. While in the past mining was done on high-end graphics cards, in recent years miners have evolved to become extremely specific computers which are designed specifically to mine cryptocurrencies. The complexity of the problems gets exponentially harder to solve with subsequent mining. This process is called “proof-of-work,” and it is very energy-intensive.
Another option is that a company creates the entire supply of a token and offers it to the public in several methods. It can be traded on a crypto exchange, sold directly, or used solely in one application, like an online game.
How Does Cryptocurrency Work?
A single cryptocurrency unit is commonly referred to as a token or a coin, and each token will often have smaller units of itself available. For instance, if you want to buy something with Bitcoin, you’re not limited to using just one whole Bitcoin. One hundred million satoshis comprise one Bitcoin. So, if you make a transaction with 1 million satoshis-, that transaction is recorded on the blockchain.
Cryptocurrency trades happen with the use of wallets. The wallets will never come in leather because they are virtual and exist as an app on your phone or computer. Initially, wallets resided directly on your computer’s hard drive, but most wallets are now cloud-based. Suppose you have a wallet through some online services. In that case, you have a name associated with your wallet, but a wallet stored locally on your computer or a specific hardware device is almost totally anonymous. Your anonymous wallet uses technology that changes your address each time to keep transactions private on the blockchain ledger.
Regardless of which wallet type you use, every time you transact with a cryptocurrency, the transaction gets logged on the blockchain as a decentralized transaction record.
What is the Blockchain?
Probably the most valuable and innovative part of cryptocurrency is the blockchain. There is a constant stream of new blockchain uses, and many are astoundingly innovative.
A blockchain is a database or a ledger distributed among computer network nodes. Due to the use of nodes, the data stored is decentralized, which guarantees the security and fidelity of the data, fostering trust without the need for a third party.
The name blockchain comes from how the data is stored. Data is collected together in groups, known as blocks, and the blocks have set storage capacities. Once a block is “filled,” it is closed and linked to the previously filled block. Thus the chain keeps growing as more information comes in, creating an irreversible timeline of data. Once a block is added to the blockchain, it is set in stone and given an exact timestamp.
How Does the Blockchain Work?
Blockchain is a distributed ledger technology (DLT) that allows information to be recorded and distributed to nodes but not edited. The ledger is immutable and cannot be deleted, altered, or destroyed.
When a transaction occurs, like sending your 1 million satoshis to someone else, it transmits to a network of computers worldwide. They solve equations to confirm the transaction’s validity and place the transactions into blocks. The blocks are then chained and recorded, and your transaction is complete.
Decentralization is the Key
Cryptocurrency and blockchain translate into complete decentralization that preserves data and guarantees it is correct.
Imagine a company with thousands of computers holding all its clients’ information in one warehouse. They have total control but also have a single point of risk. If the Internet connection fails or a hacker erases everything, that data is either non-accessible or lost.
When you use a cryptocurrency on the blockchain, that information spreads worldwide. The other nodes cross-reference any attempt to modify the information at one instance of the database and pinpoint the node with incorrect information.
All of this means that cryptocurrencies transacting on the blockchain are tremendously secure. Based on the size of cryptocurrency networks and the growth rate, the ability to modify a blockchain is essentially impossible.
Benefits of Crypto
One of the most significant benefits of cryptocurrencies is that no bank or other financial institution is necessary for a transaction.
In the past, wiring money to a friend in another country had substantial fees from the banks associated with it. A seller that takes a debit card has to pay a percentage of the transaction to their bank or merchant services provider. No bank is typically involved in using cryptocurrency, and moving money around incurs relatively low fees (such as a GAS fee for sending Ethereum transactions).
In much of the developing world, cell phones are common, but banks are not, meaning cryptocurrency is the most stable and easiest way to transact with others. There is also more faith in cryptocurrencies than in many national currencies of volatile countries. Some African and Latin American countries have higher growth rates of cryptocurrency use than the rest of the world.
Any amount of privacy you wish for is available with cryptocurrency, and anyone can trade it, as long as they have an internet connection.
Cryptocurrencies can seem a little challenging to grasp initially, so hopefully, this little primer clears up some confusion. There are tremendous uses and innovations still ahead for both cryptocurrencies and blockchain technology, and it all makes for an exciting future.
What is Mining City?
Mining City is a platform that provides mining plans, giving users access to hash power and mining rewards. The idea for the platform was conceived in October 2019 by Greg Rogowski, the brand owner of Mining City and the CEO of Prophetek.
Prophetek is the company behind the Mining City platform. It is based in Cyprus, a country with clearer cryptocurrency regulations than many other European countries.
A technological process, combining low electricity costs with storage and miner improvements, known as “Smart Mining,” became an effective way to obtain BTC.
Is Mining City Legit?
Mining City provides real hash power for users. Mining City also leaves banned markets and takes a compliant approach to new laws and regulations, adjusting to global markets.
There have been many widespread scams and attempts to defraud cryptocurrency customers over the past several years, which has prompted increased regulation and efforts by responsible companies to deter fraudulent activities and scams.
The cryptocurrency and crypto mining industries are new and gradually become more and more regulated markets. As new regulations go into effect, reputable market players, like Mining City adjust. This may mean leaving markets where crypto-related activities face new bans. That may also mean having to adjust products or services to stay in line with new laws.
You can follow Mining City’s official social media portals on Facebook, Instagram, Telegram, YouTube and Twitter to observe what Mining City undertakes to adjust to new regulations and requirements and to give Mining City your support in their efforts to become fully compliant.