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Cryptocurrency

This is how Cryptocurrency works

Cryptocurrencies are decentralised, encrypted digital assets that may be exchanged over a public ledger and verified through a process known as mining.

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This is how Cryptocurrency works

It’s pretty easy to get lost in the maze of buzzwords and technical terms surrounding cryptocurrencies. Often times, such words get lost in translation even though they needn’t be. “HODL”, for example, could easily be perceived as a direction to huddle up for the next touchdown play in American football. However, it’s a slang to describe the action of holding (going long with) cryptocurrency rather than selling.

Cryptocurrencies are decentralised, encrypted digital assets that may be exchanged over a public ledger and verified through a process known as mining. Cryptocurrency may be likened unto a peer to peer payment system (like PayPal) or a debit card. What this means is that to use a cryptocurrency, you don’t need to understand the technicalities of it anymore than you would need to understand the monetary system to use a debit card. Nevertheless, a deeper understanding of the cryptocurrency and the public ledgers which it is based on, serves to provide even more benefits for the enlightened user of cryptocurrency.

There are several reasons for why cryptocurrency is different from more conventional mediums of economic exchanges. With cryptocurrency, computers execute complex algorithms to make sure that all cryptocurrency transactions on the digital ledger are verifiable, unchangeable, and extra secure from security breaches. This reduces the need for a central source of control over the network which in effect reduces risks of fraud occurring on the ledger.

In conventional economic transactions, a central source of control of the transactions often comes in the form of a middleman. In the case of a cross-border payment from South Africa to Nigeria, this may be a bank. The costs of such transactions tend to be very steep. The World Bank reported that on a global scale, the aggregate cost of sending remittance in 2017 was $30 billion! Cryptocurrency does not require a middleman (like a bank) to be exchanged. This significantly reduces the costs of such transactions.

With cryptocurrency, the person creating the transaction has a wallet which they use to transfer balances from their account (a public address) to another using a private key (password) associated with the account they use for the transfer. You could imagine the wallet as your email, the public address as your email address, and the private key as your password. As with the internet we’re used to, information of the transactions have to be stored somewhere. In the case of cryptocurrency, this somewhere, is a blockchain network, also known as a public ledger. Consider it as a record of transactions.

The transactions in a cryptocurrency exchange are uploaded to a public ledger which shows the trade volumes and the public addresses of parties to the transactions. What is neat about the ledger is that the identity of the parties to the transactions is not shown, which allows for your right to privacy on the network.

Cryptocurrencies work in similar ways to normal currencies but with even more impressive features and capabilities which are revolutionary. They are optimised by the blockchain to be secure, cheaper (and faster) for the transfer of value, and less susceptible to inflationary risks like fiat currency. With time, they have evolved and will contine to evolve. Currently, they can be programmed to carry out actions which make transactions between parties more transparent which encourages business and user confidence. How does cryptocurrency work? Cryptocurrency works for the good of humanity, one day at a time, one transaction at a time, one new HODLER at a time.


This article is in partnership with Quidax. Quidax is a European based digital assets exchange with a focus on Africa. We provide a seamless platform for users to send, receive, buy and sell cryptocurrencies using their local currencies.

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Business

Cryptocurrency: FG should set up presidential commission on cryptocurrency – ACCI

The Federal Government has been urged to set up a presidential task force on cryptocurrency adoption.

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The Abuja Chamber of Commerce and Industry (ACCI) has urged the Federal Government to set up a presidential task force on cryptocurrency adoption, citing increased adoption of cryptos in the global markets.

This was disclosed by Dr Almujtaba Abubakar, ACCI President, in a statement on Friday in Abuja. He suggested that the FG should propose a plan which would enable cryptocurrency to be used in Nigeria’s financial markets.

“The commission should propose a plan of action for phased usage of the technological currency within the Nigerian financial system,” he said.

“We suggest that members of the commission should be drawn from the Central Bank of Nigeria (CBN), Nigerian Stock Exchange, banking /financial Institutions, bitcoin community, digital currency experts and relevant MDAs and organised private sector.

It is our considered view that such a commission will have all facts on the table and will be able to chart a sustainable path forward for Nigeria,” he added.

The ACCI cited Vice President, Osinbajo’s views on cryptocurrency being a global phenomenon that nations must address rather than run away from.

“The policy lacuna impresses on the administration to consider possible options to prepare the nation to cope with the positive and negative fallouts of this new financial technology,” the ACCI boss added.

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Nairametrics reported that the Securities and Exchange Commission (SEC) had revealed that it was working with the Central Bank of Nigeria for a better understanding and regulation of cryptocurrencies in the country.

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Cryptocurrency

Dogecoin up 168%, more valuable than Polkadot, Cardano

The fast-rising crypto at the time of writing traded at $0.359439 with a daily trading volume of $63.5 billion.

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Dogecoin (DOGE), once again, shocked traders, investors and many crypto analysts by gaining over 200% to flip Cardano and Polkadot, becoming the sixth most valuable crypto asset by market value.

The fast-rising crypto at the time of writing traded at $0.359439 with a daily trading volume of $63.5 billion.

Dogecoin is up 167.95% for the day on the FTX exchange. The dog meme crypto is now the 6th most valuable crypto with a market value of $46.4 billion.

READ: Bitcoin miners are consistently earning $50 million daily

Recent data from Coinmarketcap reveal it has a circulating supply of 129,210,007,256 DOGE coins and the maximum supply is not available.

Market pundits argue that the credence of the world’s leading billionaires might have given the fast-rising crypto enough support amid the recent price correction ongoing in the flagship crypto market. These two individuals are Elon Musk and Mark Cuban.

A leading crypto social analytic firm revealed the altcoin has the highest number of activities in the past 18 hours and social mentions of over 410, 0000, thereby making it the most popular crypto on social media.

READ: Crypto market surges above $2 trillion, as Bitcoin stages a huge comeback above $60,500

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