What is Cryptocurrency

The first characteristic of a cryptocurrency is to be completely and solely electronic. It exists only on computer network. In other words, if you do not have a computer, tablet or mobile phone, you do not have access to this type of currency.

Traditional currencies such as euro exist as notes or coins, which is not the case for cryptocurrencies. But you should know that traditional currencies are increasingly dematerialized. Thus, when you make a transfer, you electronically transfer a sum of money from one account to another. It is the same for the samples. Coins and currencies represent only 15% of the currency in circulation.

A second difference lies in the very nature of money. Traditional currencies are mainly bank account entries kept by bankers. A transfer is therefore to write on a debit account and to spend the same writing, in the opposite direction, in credit on bank account that receives the money.

Crypto-currencies are computer codes, programs, which are sent from one computer to another. This is the reason why these are 100% electronic currencies.

It's "encrypted" currency

Traditional currencies, especially banknotes, can be imitated by counterfeiters. Every year, between 500,000 and 1 million counterfeit euro banknotes are withdrawn from circulation. These are mostly 50 € notes and all represent significant sums.

Crypto-currencies, as their name suggests, are encrypted currencies and encryption is mainly in the form of a "blockchain", that is to say in the form of a database that contains the history of all the exchanges made between users since its creation. This database is secure. It is shared by its different users, which allows them to check chain validity.

If the blockchain is public (some may be private), it is a great accounting book that everyone can read freely and freely, on which everyone can write with the agreement of others but impossible to erase and indestructible.

To protect against counterfeiting, the newly created currency, the new block, must demonstrate a "proof of work" to be validated by other users. A proof of work is a coding, a solution of algorythmic problems, which requires a lot of time and energy for the creator but is easily verifiable by a third party.

So, on the blockchain, if you want to modify a transaction, you have to change it at the same time on all computers in the network, which is impossible.