What is the working mechanism behind cryptocurrencies?

1 answers

• Manuel sadot Sanchez memdezAug 01, 2023 · 2 years ago
  Cryptocurrencies, such as Bitcoin and Ethereum, work based on a decentralized network called blockchain. This technology allows for secure and transparent transactions without the need for intermediaries like banks. When a transaction is initiated, it is broadcasted to the network and verified by miners. Miners use their computational power to solve complex mathematical puzzles, which helps secure the network and validate transactions. Once a transaction is verified, it is added to a block and added to the blockchain. This process ensures the integrity and immutability of the transaction history. Additionally, cryptocurrencies rely on consensus mechanisms, such as proof-of-work or proof-of-stake, to prevent double-spending and maintain the stability of the network. Overall, the working mechanism behind cryptocurrencies is a combination of blockchain technology, cryptography, and decentralized consensus algorithms.
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