How is Cryptocurrency Created?
Cryptocurrency is making waves in today’s society. Like a new person in the block, everyone is talking about it. However, not everyone knows how this currency is created. This article aims to explain how cryptocurrency is designed and priced. New coins are created through a digital mining process for some cryptocurrencies like Bitcoin and Ethereum. Mining is not the only way to generate new coins. For some, developers may create tokens as rewards for existing coin holders.
In the traditional finance world, we see the stable (and unfortunately low) yield on people’s money, not even enough to cover inflation (i.e. loss in the value of one’s money). In the crypto finance world, yields can be seemingly so high up to 200%-400% APY. However, this changes every day and can be as low as 0% the next day. Moreover, the space is plagued with hacks that can result in -100% / losses on a user’s funds.
Derysq was created to not only provide a stable high yield but also to protect users’ crypto (i.e. Bitcoin, Ethereum, USDC, Dai, USDT) against hacks. Derysq was developed in order to (1) maximize the gains, (2) insure against losses, and (3) provide stable passive crypto income (in a crypto world with highly volatile interest). Sign up here to be one of the early users of Derysq.
Using Bitcoin To Explain Cryptocurrency Creation Process
Bitcoin is created through mining. It is a crypto creation process involving advanced computer hardware and software. Note that all cryptocurrency transactions are verified through mining. As this process of verification or validation takes place, new crypto units are created.
Each time a transaction takes place, a cryptocurrency miner tries to decrypt codes. These codes contain complete transaction information and miners create additional cryptocurrency units to decipher which code includes which transaction information.
Without this decryption, transactions will not be authenticated. The decryption reveals each trade and associated information. A decrypted block is added after a transaction has been certified. As one would surmise, cryptocurrency mining is capital intensive. Due to this, individual miners are hard to find. Instead, individual miners pool their resources together to mine.
If mining cryptocurrency is expensive, what is in it for people, you may be wondering? There is a reward system where miners are rewarded with a unit of the cryptocurrency they were able to decrypt. Through collective effort, miners can increase their rate of success. However, that also means they get to share whatever reward they get from mining.
Facts About Cryptocurrency
The following facts about cryptocurrency will help you to understand more about how the creation process works:
Cryptocurrency is software and does not require a central authority. Its creation, storage, and transactions are encoded.
Cryptocurrency transactions are stored in a database known as a blockchain
The software that controls the system is decentralized. What this means is that there is no central control system. Instead, it is hosted on an individual personal computer
The supply and sand for cryptocurrency determine their pricing. The code determines these market dynamics.
Transactions are added to the blockchain and this is known as mining. The cryptocurrency algorithm makes it possible to award units to miners who successfully decrypt the code as rewards.
Summary
With recent events in the world, cryptocurrency is likely not leaving the financial scene in different markets and countries. Many individuals and established companies are beginning to pay more attention to cryptocurrency and how it can be incorporated into the products and services now existing in the world.
Derysq was created to not only provide a stable high yield but also to protect users’ crypto (i.e. Bitcoin, Ethereum, USDC, Dai, USDT) against hacks. Derysq was developed in order to (1) maximize the gains, (2) insure against losses, and (3) provide stable passive crypto income (in a crypto world with highly volatile interest). Sign up here to be one of the early users of Derysq.