How do crypto transactions work?

Crypto transactions follow the same schematics of any other type of digital or online transaction. Currencies are transferred from one peer to another using software. The software is known as cryptocurrency wallets or crypto wallets. One needs to know the private key required to initiate the transaction. All crypto transactions are encrypted.

What are the mechanics of cryptocurrency?

The mechanics of using cryptocurrency are often as simple as scanning a QR code or copy and pasting a long ID, but what happens in the background is far more involved than your typical bank transaction, since the transaction has to be verified by lots of distributed servers, rather than one bank or exchange.

What is the difference between cash and cryptocurrency?

Unlike cash transactions, no bank or government authority verifies the transfer of funds. Instead, these virtual transactions are recorded in a digitized public ledger called a “blockchain.” Individual units of the currency are called “coins.” Introduced in 2009, Bitcoin was the first cryptocurrency and remains the most widely used.

What are the different types of cryptocurrency?

Bitcoin was the first cryptocurrency, and it remains the most popular, though it’s been joined by Ethereum and Litecoin, among many others. Cryptocurrency can be used to pay for goods or services, to invest, or simply to exchange funds with someone else. The coins can also be exchanged for traditional currency.