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Monday, September 28, 2020

Understanding the Technology Behind Digital Currencies

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Digital currencies and assets have become more popular of late and the reasons for that are multiple. Some people just want to be part of the crypto movement, while others are heavily reliant on digital currencies to protect their wealth, such as unbanked populations and those using Bitcoin to seek refuge from hyperinflation.

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This popularity has led to more businesses and service providers to accept them as a form of payment. From KFC to Canadian tax authorities, the number is continually growing and further businesses are set to get involved.

Some businesses are waiting for the market to be more popular and regulated before offering to accept cryptocurrencies, within the online casino market, RoyalVegas CA is one such example.

Digital Currencies Using the Blockchain

The technology behind such a revolutionary trend is not as confusing as you may expect. Many digital currencies, including Blockchain the most successful to date, rely on blockchain technology.

The name blockchain derives from the words block and chain – exactly what a blockchain is. It is a chain of blocks, each block representing an item of data.

When a transaction is made with digital currencies like Bitcoin, the transaction is authenticated and verified before being added to the blockchain.

These chains of information are in the public view and cannot be adjusted, meaning they are present, public and permanent.

So, Who Verifies Payments?

Miners must record payments on the blockchain and verify them. This is now usually done by supercomputers on large mining farms. The work done by these computers takes over the work done by banks.

Due to no central authority being involved like at a bank, this is what makes digital currencies decentralised – and it is also what makes them a radical and revolutionary product on the current financial landscape.

Is the Technology Safe?

As mentioned, blockchain technology is exceptionally secure. Once a payment is made and it has been verified on the blockchain, it cannot be altered under no circumstance. It will forever be stamped within the chain and remain available for anyone to see.

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This has not stopped people from losing money by investing in digital currencies. More often than not, this is because of a poor investment strategy or insecure goings on elsewhere.

For example, the exchange platform – a place where you exchange fiat currencies and digital currencies – and the wallet you keep your coins in could be insecure or hacked.

This technology may have flaws but there are ways and products that will keep your digital coins safe.

Are Blockchains Only for Digital Currencies?

Just like an acceptance of cryptocurrencies is spreading to fast-food chains, government departments and online casinos, so are blockchains.

Different industries are implementing blockchain technology for their own benefits away from financial means.

For example, some cars are communicating with a blockchain to record its accurate history and reduce odometer tampering and seller fraud. The use of blockchain, just like these digital currencies themselves, is rising.

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