What do cryptocurrencies do?

Consider blockchain to be a network of millions of interconnected user nodes that keeps track of transactions. This record-keeping infrastructure is built and maintained by these user-nodes, who also utilize it for their own records. Users must use “ink” to write their records since the technology is intended that way. Users receive ink as a charge from other users when they construct and maintain infrastructure. After that, the users write with their own ink. This makes the blockchain ecosystem self-sustaining, as it is not owned, built, or maintained by any government or organization.
This ink is nothing but cryptocurrencies. The cryptocurrencies are given as an incentive for the nodes to continue building and maintaining the blockchain. Thus, a self-sustaining blockchain aka “public” blockchain is not possible without cryptocurrencies. A “private” blockchain that is built and maintained by someone privately (for eg., a CBDC blockchain run by the government) may not need cryptocurrencies.

Cryptocurrency is called digital money, encrypted and protected using special algorithms. The main difference from the same “web-money” is in absolute decentralisation, independence from any financial and state system, banking structures. It’s achieved thanks to the principle of work on the blockchain technology, which allows you to consistently cryptograph the operations. Today in the world there are hundreds of different cryptocurrencies, but the main bitcoin remains. What are its advantages over traditional currencies?

  1. All transaction data is stored simultaneously on multiple user computers connected via the Internet. Simply put, a cryptocurrency doesn’t have a single center or control system - it’s controlled simultaneously by many interconnected devices. All participants at the same time have equal rights and statuses, and can also remain anonymous.
  2. An important characteristic of this self-regulating currency is its direct circulation without the need to involve intermediaries and third parties, the absence of a commission. At the same time, digital currency is generally available, since anyone can access an account with Internet access and appropriate computer facilities.