You don’t have to be an internet savvy or a frontline investor to know about Bitcoins or the impact it created on a global level. It was a quite a buzz that was created about a few months back when the value of bitcoin reached great heights. Everyone started googling about it to know what it actually was and how it works. Bitcoin was created in 2009 by a person who goes by the pseudonym Satoshi Nakamoto.
This paved way for other cryptocurrencies to come into the limelight and people started exploring the world of cryptocurrencies and the tremendous investment potential that it holds. Ethereum. Litecoin, Ripple, etc.. are few of the noticeable cryptocurrencies. Pundi X is one such cryptocurrency and is slowly making a name for itself. Its token is termed as npxs and is based on Ethereum blockchain.
How do Cryptocurrencies work?
The transactions of cryptocurrencies are made possible by using blockchain technology. The transaction of cryptocurrencies are untraceable and you won’t be able to find who has made the transaction. The identity of the person who makes the transfer are encrypted and once the transfer is complete, the transferred cryptocurrencies are mined to verify and authenticate the transaction. The transactions are then added to a ledger.
What gives value to Cryptocurrencies?
You don’t have to search for this answer anywhere outside. We decide the value of cryptocurrencies. The most basic economic terms “demand” and “supply” govern the value of the cryptocurrencies. The value of the cryptocurrencies vary depending upon the market sentiment. Market sentiment is referred to as crowd psychology or the collective thought process of the investors in evaluating the market. If more people buy bitcoins, the value of the bitcoin increases as it creates a demand. If more people sell it, the value of the bitcoin decreases as excess supply is created.
Mining of Cryptocurrencies :
Cryptocurrency mining or crypto mining, in short, is the process of verifying the transactions made by cryptocurrencies and adding it to a ledger. Once a transaction is made, the crypto miner mines the cryptocurrency and adds it to the ledger. Only then the transaction is confirmed. Mining involves the process of solving a complex mathematical problem. Anyone who has the resources can mine the cryptocurrency. The number of crypto miners have increased exponentially and the first person to mine the cryptocurrency is entitled with few cryptocurrencies. It requires a high end specification computer, high internet speed and specialized equipment. It is not easy to mine the cryptocurrencies as there is a lot of competition involved and the investment in purchasing the equipment is also quite high.