What is Crypto currency and how it is works

Hello , folks . For the past years online marketing has developed from a single scratch and was brought by the way people are engaged in the online business and the way there are struggling to market their goods. T traditionally we used fiat money to acquire goods that is around 1000 years ago. The difference between fiat money and crypto currency is that fiat money is legal tender whose value is tied to a Government Issue currency like the use of dollar while crypto currency is the encrypted data stirring that denotes a unit of currency. The article describes what is crypto currency and continues to answer why is crypto currency most used and why is been one of the good way of online marketing. And also explains how crptocurrency works.


Most of the people ask what Crypto currency is. Crypto currency is an internet based medium of exchange which uses cryptographic functions to conduct financial transactions. Also you can say that crptocurrecy is a digital currency that is exchanged between peers without the need of third party, like a bank. It enables consumers to digitally connect directly through a transparent process, showing the financial amount, but not the identies of the people conducting the transaction. Crypt currency exchange is somewhat similar to the global online payment system, PayPal, except the currency being exchanged is not traditionally money. The cryptocuurency procedures uses digital safeguards to ensure the security of transactions. In addition each transaction must be confirmed in a digital public ledger, called a block chain, through a process known as mining.


Transaction: this is the transfer of currency between two digital wallets. A transaction is submitted in public ledger to await a confirmation before the exchange can be concluded. During a transaction, an encrypted electronic signature based on a mathematic formula is requires as a proof of ownership. The confirmation process is conducted by people called miners.

Public ledger: When a transaction is confirmed that is stored in a public ledger called a block chain. The public ledger verifies ownership of the crypto currency and ensures that there is legitimacy of record keeping.

Mining: This process is used for confirming transactions before they may be added to the public ledger. A miner must know how to solve a computational puzzle, called proof – of – work to prevent exploitation of crypto currency mining. Mining is an open source which means anyone on the network can confirm a transaction block to the public ledger, or block chain. Miners receive a fee in crypto currency for their work .

With traditional banking systems, the sender and the receiver of the transaction must be intermediate to facilitate centralized transactions. This type of transaction can command large fees and capture the private data of individual identies while providing a decentralized, transport mechanism for transferring value at lower cost.


Ten years ago, crypto currencies were an academic concept. Largely unknown to the world’s general population. This all changed in 2009 with the creation of Bitcoin. Today most people are aware of cryptocurrencies, although may not be familiar with how the system works. The crypto currency market continue to gain traction in various facets of government, business and personal financial activities. Government and large corporations are now looking closely at the cryptocurrency market to evaluate how they can adapt the transaction mechanism specially blockchain technology to exchange value.


In the 1990s, many attempts were made at creating digital currencies using decentralized control, but they all failed for some of the reasons. In late 2008, Satoshi Nakamoto developed a peer to cash system which he called it Bitcoin. This was the first time someone was able to build a secure, decentralized digital cash system. Satoshi Nakamoto’s system also prevented double spending, traditionally something that only a centralized server could accomplish. Nakamoto’s innovation became the emergence of cryptocurrency. A network that operates on system of checks and balances, where every entity within the network the network checks there is no attempts to spend the same currency twice. No one thought it was possible to reach consensus without central authority but the emergence of Bitcoin proved it wrong, that it was achievable.


BITCOIN: being one of the of the top five cryptocurrencies as proved on the end of November 2017. Bitcoin was the first cryptocurrency to be traded and today remains the most commonly used. With a market cap of around $180billion, Bitcoin stands head and shoulders above any other cryptocurrency and is considered the gold standard for this industry.

ETHERUM: Way behind in second place to bitcoin is either. This is the currency token used in the etherum blockchain and has a market cap of over $18 billion. Developed in 2015, it is a turning point complete programmable currency. This gives it an edge before Bitcoin because it enables developers to build different technologies and apps around it, and it can process complex contracts and programs besides transactions. Ethereum’s blockchain code has been used to launch other cryptocurrencies in 2017.

RIPPLE. It has been used by several banks, including UBS and Santander it can truck other transactions besides cryptocurrencies. It was actually founded in 2012, it has a market of $12 billion net worth.

Binance coin (BNB)

The Binance coin is a form of crptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch 2017, Binaice coin has expanded past merely facilitating traders on binace’s exchange platform. Now it can be used for trading, Payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Etherum or bitcoin. BNB’s price in 2017 was just $0.10. By the beginning of March 2022, its price had risen around $413, a gain of approximately410, 000%.


The internal revenue Service is released very little guidance on the taxation of cryptocurrency. However it did it issue a 2014 notice in which they stated that cryptocurrency will be treated as property of federal income tax purposes. Depending on how the cryptocurrency is held it could be classified as business property investment property or personal property. In addition to the character of the gain, its critical owners of cryptocurrency track the basis. Every time cryptocurrency tack their basis. Every time cryptocurrency is used for the exchange of goods and services a taxable transaction occurs. For example events that are considered taxable events include a coin to fiat sale, coin to coin swap, purchases make by the cryptocurrencies and their services.

Other complexities around taxation of cryptocurrency exist and it’s very important that individuals and business continue to monitor future guidance.

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