What is cryptocurrency, how to use it?
Bitcoin and other cryptocurrencies have many tangible advantages over traditional finance. To use them effectively and safely, you need to understand the features of decentralized technologies.
What is a cryptocurrency
Cryptocurrency is understood as a digital version of money that operates on the basis of cryptographic technology. That is, it is a currency that has no physical counterpart and is a code that no one can change.
All information related to cryptographic digital money is recorded in the blockchain – a decentralized database. It consists of a sequence of information blocks, each of which contains information about a series of successful transactions. At its core, the blockchain is a large and ultra-reliable ledger of transactions and agreements. It cannot be hacked or changed already entered data.
For example, if the conditional user Fedor acquires 5 bitcoins, then the block will include a record about the change in the owner of these coins. The entered information will remain in the blockchain forever. After the sale of 5 BTC to another user, a record of a successful transaction is again created.
The cryptocurrency itself is mined through complex calculations. This process is called mining. Users who provide their technical resources to carry out the necessary computational processes are miners.
To understand in detail the features of this technology, as well as to understand the real reasons for its appearance, it is worth studying the history of the creation of cryptocurrency.
Safety
Cryptocurrency is an asset that exists only on the Internet, and hackers can try to take it. But this can only be done if you have access to special codes stored by the owner of the coins. We are talking about public (open) and private (closed) keys. Therefore, those who own bitcoins and other digital currencies must competently protect their assets.
There are already solutions on the market that provide secure storage of codes that are used to conduct transactions with cryptocurrency.
2 groups of crypto wallets are most in demand:
- Hardware. These are special devices into which private keys are loaded – a secret combination of characters necessary to confirm transfers with digital money.
- Software. This is a special application that is installed on a PC or smartphone / tablet. Such wallets may have additional useful features.
Hacking the blockchain itself in order to steal funds will not work. The reason is its publicity and decentralization. This is easily explained by the example of bitcoin. To make changes to already created records, you need to gain control of at least 51% of the computing power that ensures the functioning of the network.
It must be understood that all PC miners are dispersed in different countries. And their total number is 1+ million. That is, hackers will need to find and hack more than 500,000 computers. But even in this case, they will not receive full control over operations with the BTC cryptocurrency.
Therefore, users should not worry about the reliability of the network itself. We need to focus more on finding reliable wallets to work with digital currency.
Speaking about security, it is worth thinking about the regulation of the market by the official authorities. This applies to both fraud protection methods and popular questions about taxation.
Now you know almost everything to get started. But how to track activity in BSC? The best resource for this is BscScan.
If you’ve come across DeFi before, you’re probably familiar with this site. It works similarly to EtherScan – both sites were developed by the same team.
So, you have found your addresses. What else is worth paying attention to? There are several handy metrics that keep track of current activity in the BSC. We’ve featured them all in 6 Binance Smart Chain (BSC) Metrics You Should Know About.
Summary
Binance Smart Chain is developing rapidly, and user activity will only increase in the future.
If you’re interested in DeFi, it’s worth keeping an eye on them. Where is the best place to do it? Follow the Binance Chain community on Twitter for the latest updates and news about BSC.
Still have questions about Binance Smart Chain? Visit our Q&A Ask Academy platform where your questions will be answered by the Binance community.