How does crypto works ☑️

Cryptocurrency works through a technology called blockchain, which is a decentralized and distributed ledger that records all transactions across a network of computers.

Here is a simplified explanation of how cryptocurrency works:⭐

1. Cryptography: Cryptocurrencies use cryptographic techniques to secure transactions, control the creation of new units, and verify the transfer of assets.

2. Blockchain: Transactions are recorded in blocks, which are linked together in a chain. Each block contains a list of transactions, a timestamp, and a cryptographic hash of the previous block. This creates a secure and transparent record of all transactions.

3. Decentralization: Unlike traditional centralized systems, cryptocurrencies operate on a decentralized network of computers called nodes. These nodes work together to validate transactions and maintain the integrity of the blockchain.

4. Consensus Mechanism: To prevent fraud and ensure the accuracy of transactions, cryptocurrencies use consensus mechanisms such as Proof of Work (PoW) or Proof of Stake (PoS). These mechanisms require participants to solve complex mathematical problems or stake their cryptocurrency to validate transactions.

5. Wallets: Cryptocurrency wallets are digital tools that allow users to store, send, and receive cryptocurrencies. Each wallet has a unique public address and private key for secure access.

6. Mining: In some cryptocurrencies, like Bitcoin, miners use powerful computers to solve complex mathematical problems and validate transactions. Miners are rewarded with newly minted coins for their efforts.

7. Transactions: When a user initiates a transaction, it is broadcasted to the network and added to a block. The transaction is then verified by nodes in the network before being permanently recorded on the blockchain.

8. Security: Cryptocurrencies are secured by cryptographic algorithms and private keys, making them resistant to hacking and fraud. However, users must also take precautions to protect their private keys and wallets from theft.