What are cryptocurrencies?


Cryptocurrencies are one of the variants of electronic money that exist only in the Internet world and do not have a material form. They were created as an alternative to traditional money and gained popularity for their progressive design, significant growth potential and anonymity.

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Cryptojacking (also referred to as "malicious mining") is a relatively recent online threat. Malicious objects associated with this threat hide on computers or mobile devices and use their resources for the extraction (“mining”) of electronic money – cryptocurrencies. This threat is actively developing, acquiring new forms: it hijacks Internet browsers, affects any type of device - from desktop computers and laptops to smartphones and even network servers.

As with other malware attacks, the main motive of the evil computer genius is profit, but unlike other threats, this type of malware tries to hide its presence from the user. To understand the mechanism of this threat and the means of protection against it, you must first understand the key concepts.

Composed of two words - "cryptography" and "currency" - the term "cryptocurrency" refers to electronic money, the use of which is based on the principles of complex mathematical encryption. All cryptocurrencies exist as encrypted decentralized monetary units that can be freely transferred between network participants. In simple terms, a cryptocurrency is electricity converted into lines of code that have real monetary value.

Units of cryptocurrency, called coins, are just records in a database. In order to complete a transaction and make changes to the database, a number of conditions must be met. Think about how you track real money transactions in your bank account. When you authorize a transfer of funds, withdraw money from an account or deposit, the bank database is updated with information about new transactions. Cryptocurrencies work in a similar way, however their database is decentralized.

Unlike traditional currencies, cryptocurrencies are not backed by a government or a bank. They are not subject to government oversight or the policy of a central regulator. Cryptocurrencies are decentralized: they are controlled by multiple copies of the same database, all running simultaneously on a network of millions of computers. Therefore, such a database does not belong to any person or organization. Moreover, the cryptocurrency database functions as a digital ledger. It uses encryption to control the creation of new coins and verify funds transfers. At the same time, constant and complete anonymity of operations with cryptocurrency, and hence its owners, is ensured.

The decentralized and anonymous nature of cryptocurrencies means that there is no regulatory body that decides how many new currencies to release into circulation. On the contrary, most cryptocurrencies are issued through a process called mining. If you do not go into details, in the course of mining, computer resources turn into “coins” of crypto-currencies. At first, mining could be carried out on any computer, but very soon this process took on the character of an arms race. Today, most miners use powerful specialized computers that continuously mine cryptocurrency. Particularly inventive people come up with new ways of mining - this is how cryptojacking appeared. Instead of buying an expensive mining computer, hackers infect ordinary computers and use them as a network that performs the same functions.

Units of cryptocurrency, called coins, are just records in a database. In order to complete a transaction and make changes to the database, a number of conditions must be met. Think about how you track real money transactions in your bank account. When you authorize a transfer of funds, withdraw money from an account or deposit, the bank database is updated with information about new transactions. Cryptocurrencies work in a similar way, however their database is decentralized.

Unlike traditional currencies, cryptocurrencies are not backed by a government or a bank. They are not subject to government oversight or the policy of a central regulator. Cryptocurrencies are decentralized: they are controlled by multiple copies of the same database, all running simultaneously on a network of millions of computers. Therefore, such a database does not belong to any person or organization. Moreover, the cryptocurrency database functions as a digital ledger. It uses encryption to control the creation of new coins and verify funds transfers. At the same time, constant and complete anonymity of operations with cryptocurrency, and hence its owners, is ensured.

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