Cryptocurrency is a virtual currency, as well as a mutual transfer mechanism with decentralized emission and accounting system. The operation of the system is limited by a distributed computer network, and information about transfers (transactions) in the vast majority does not go through encryption, but is open. There is no external or internal administration, and government agencies, private organizations, financial corporations and other market entities cannot influence the operation of this mechanism, unlike "traditional" payment systems. The most popular cryptocurrency (and the first to appear) is bitcoin (BTC), which has an open source electronic code. The smallest monetary unit of Bitcoin is called Satoshi and is equal to 0.00000001 bitcoin. The documentary film “Bitcoin. Gold of the Digital Age.
It is fundamentally important that a third party, the so-called intermediaries, is not needed to carry out operations with cryptocurrency. All transactions are instantaneous, and buyers and sellers are absolutely mobile: there is no need to visit a bank branch or deposit funds to an electronic wallet - the cryptocurrency is sent to another person (conditional seller) directly.
What is a cryptocurrency for dummies is easiest to explain using the example of creating bitcoins.
The process of creating bitcoins is based on solving various mathematical problems by computers. This process is called mining. There is a transaction log accessible to all - a journal in which information about transfers is recorded. All transfers along the chain (blockchain) go to miners (“miners”, “miners”), who must go through millions of possible combinations and pick up a single hash - an identifier, an original and unique file name, a formula that does not depend on how the user calls the file . The hash is suitable not only for all new transfers, but also for the secret key, access to which is a necessary condition for the miner to receive a reward of 25 bitcoins. A large number of miners are fighting for the same hash at the same time, and as soon as the goal is reached - the hash is picked up - the block with transactions is automatically closed, and the miners can continue working in the next block. This whole process takes place without the participation of any central servers - only PC users participate in it.