How does cryptocurrency work?

How does cryptocurrency work?

Cryptocurrency is monitored by a peer-to-peer network using a distributed database. The participants on the networks use a pre-specified consensus mechanism to verify transactions. Each new transaction is added to a chain of other data blocks to form what is referred to as the blockchain.

Every individual peer on the network has the complete ledger of all transactions every carried out on a particular blockchain. Transaction confirmation is the job of miners on the network. Once a transaction is confirmed, it cannot be modified or reversed. It is broadcast across all network nodes to form an immutable record.

Cryptocurrency transactions are carried out using sets of private and public keys. These respectively encode and decode digital information to allow for the movement of digital assets from one user to another. Such transactions attract relatively low fees and allow for easy payment processing.