Digital Security and Cryptocurrency Transactions: Understand How it Works

Many people stop investing in cryptocurrencies because they consider something unsafe. After all, how many times do we hear cases of exchanges that were hacked, or even users who lost hundreds of bitcoins due to lack of backup?

What is left out of this story are the thousands of people who had their credit card cloned, or their own bank account invaded by scammers. Although in most cases the customer is able to recoup the loss, this cost is embedded in the fees charged by financial institutions.

The blockchain, that database stored on a large network, is inviolable. This gives transactions much more security and transparency. At the same time, the world of cryptocurrencies allows you to be your own bank, therefore, responsible for storing your valuables.

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The Digital Transaction Mechanism

The technology behind Bitcoin is the blockchain, created to enable a decentralized transfer system. Each blockchain address has a public and a private key, which should never be shared.

Think of the public key as your bank account: with this number you can send and receive cryptocurrencies over the network. The private key, on the other hand, acts as a bank password, ensuring that only its holder can make transfers from this address.

Briefly, these are the stages:

Request: request to include the transaction in the network;

Verification: network checks if the transaction is valid, and if there is enough balance;

Addition to the block: transaction enters the block, and miners compete for the encryption solution;

Blockchain Join: Successful miner transmits the new block, which will be validated by the network and attached to the blockchain.