Key Ideas and Technology Behind Crypto Currencies

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Crypto Currencies

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Introduction
The term cryptocurrency is defined as a digital asset developed to work as a
medium of exchange that utilizes appropriate cryptography for securing
financial transactions and verifies the transfer of assets. It is determined
that crypto currencies utilize decentralized control as opposed to
centralized numerical currency and dominant banking schemes
(Abramowicz, 2016). The aim of the paper is to determine the key idea and
characteristics behind crypto currencies and test the factors which are
likely to hamper the development of crypto currencies. It is found that the
decentralized control of every cryptocurrency mainly works through
distributed ledger technology such as blockchain technology. This report
will include numerous sections such as key ideas behind cryptocurrencies,
factors that hamper the development of cryptocurrencies and consequences
of cryptocurrencies.
Key ideas and technology behind crypto currencies
Cryptocurrency refers to an internet-based technique used as a medium of
exchange in the companies. The key idea behind the cryptocurrency is to
conduct financial transactions effectively which is not handled by any
authority. Caporale, Gil-Alana, and Plastun, (2018) provided their views and
determined that cryptocurrency leverage blockchain technology in order to
obtain transparency, immutability, and decentralization. It is found that
cryptocurrencies may be transferred easily between two parties using
private and public keys. Such kinds of processes may be completed with
minimal processing fees that enable consumers to avoid the additional
charges required for performing financial transactions. In this modern
generation, cryptocurrencies have become a global phenomenon that helps
the companies to perform financial transactions in a reliable manner and
manage the data processing related concerns easily.

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It is an advanced system that is mainly based on the blockchain technology
that uses the concept of cryptography for converting the transmitted signals
into codes that require public and private keys for accessing private details.
Therefore, it is reported that the utilization of cryptography techniques are
helpful that helps to address unwanted signals from the systems and
enhance the privacy of financial transactions effectively. Delmolino, et al.,
(2016) highlighted that the transaction in cryptocurrency mainly perform
using the concept of blockchain technology where the users require to
provide complete information and suggest a private key for performing
transactions for securing financial information. From a recent study, it is
determined that the term cryptocurrency is defined as a virtual currency
that utilized cryptography technology in order to secure the transactions.
Most of the crypto currencies are decentralized networks based on the
blockchain networks.
A cryptocurrency is an advanced digital asset grounded on a network that is
distributed across a huge number of computing systems. Such kinds of
decentralized structures enable consumers to perform financial transactions
without using any authority. According to DeVries, (2016) blockchain has
the potential to ensure the integrity of transactional information in a
reliable way due to which it is used in the crypto currencies. Many
consumers and experts agreed that blockchain and related technology helps
to manage privacy concerns and enhance the security of crypto currencies
effectively. From previous literature, it is determined that crypto currencies
refer to the systems that enable for performing transactions securely with
the help of encryption-related programs and techniques. Bitcoin was the
first cryptocurrency that was implemented in 2009.
It is reported that crypto currencies hold the potential of creating it calmer
to relocation funds straight among two revelries, without the involvement of
any authority including bank or credit card community. Such kinds of
transfers are instead secured with the help of private and public keys based

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on the cryptographic models. Therefore, it is reported that the utilization of
crypto currencies can help the consumers to securely perform the financial
transactions and manage the issues occurred in the systems using
blockchain technology. In advanced cryptocurrency networks, a wallet of
the consumer contains a public key that helps the consumers to manage the
confidentiality related issues and enhance the privacy of data effectively.
Fund transmissions are completed with negligible dispensation fees that
enable individuals to evade the sheer fees taken by banks for completing
the transactions among two parties.
There are different types of crypto currencies that are based on blockchain
technology including bitcoin, cryptoKitties, and ethereum. It is reported
that the involvement of blockchain technology in crypto currencies helps to
decentralize public database accessible to each consumer and manage the
risks occurred in the systems. Eyal, (2017) determined that
cryptocurrencies do not have a central computer but use distributed
systems that help to manage the performance of computing networks and
enhance the level of privacy. Encryption is an effective algorithm utilize in
the cryptocurrencies that have the potential to secure communication-
related networks from the criminals.
The encryption helps to convert the signals into the codes that manage the
privacy of transmitted signals and require a private key for accessing the
confidentiality of data. Fry and Cheah, (2016) proposed research and
determined that all crypto currencies utilize distributed ledger technology
in order to remove third parties from the computing devices. The major
feature of this technology is that it is transferred to the databases in which
transactional data is stored. The DLT technology is also defined as the
blockchain technology that was developed by Satoshi for Bitcoin in order to
manage the issues and risks occurred in the cryptocurrency networks. It is
found that the term blockchain is a database of each transaction that has
the capability to manage the working operations of the cryptocurrencies.