How do cryptocurrencies work?

To understand how cryptocurrency works, you first need to know what blockchain is. Basically, it is a database that records and verifies all transactions made with digital assets.

This means that information regarding transactions is stored on a decentralized network of computers, and not on a central server. This system is where transfer numbers and wallet balances are recorded, for example.

Furthermore, personal information is not linked to the operation, which allows transfers to be carried out anonymously.

Cryptography is used to issue digital currency units and, thus, guarantee secure transfers.

This technology also protects data stored on the blockchain from cyber attacks and other fraud, as well as preventing digital assets from being cloned or counterfeited.

In addition to being considered a type of investment, cryptocurrencies are increasingly being accepted as a form of payment when purchasing products and services, especially in the United States and European countries.