Chapter 2: How Do Digital Currencies Work?
So, how do digital currencies actually work? Let's take a closer look at the process of sending and receiving digital currencies.
When you want to send a digital currency to someone, you create a transaction on the blockchain by specifying the recipient's public address and the amount of currency you want to send. You then sign the transaction with your private key, which is a unique code that only you have access to.
The transaction is then broadcast to the network, where it is verified by nodes (i.e. computers) on the network. These nodes check to make sure that the transaction is valid (e.g. that you have sufficient funds to make the transaction) and then add it to the blockchain.
Once a transaction is added to the blockchain, it is considered to be complete and cannot be altered. This ensures that the transaction is secure and cannot be tampered with.
When the recipient receives the digital currency, they can use their private key to access it. They can then either keep it in their digital wallet or exchange it for other currencies or goods and services.
Chapter 3: How to Use Digital Currencies
Now that you have a basic understanding of how digital currencies work, you may be wondering how you can use them in your everyday life. There are several ways you can use digital currencies, including:
Buying goods and services: Many businesses, both online and offline, now accept digital currencies as a form of payment. You can use your digital currency to purchase a wide range of goods and services, from coffee to plane tickets.
Investing: Some people choose to hold onto their digital currencies as an investment, hoping that their value will increase over time. Digital currencies can be highly volatile, so it's important to do your research and understand the risks before investing.
Sending money internationally: Digital currencies offer a fast and cost-effective way to send money internationally, as they bypass traditional intermediaries such as banks.
Earning rewards: Some companies and organizations offer rewards or incentives in the form of digital currencies for completing certain tasks or contributing to their projects. For example, you may be able to earn digital currency for participating in online surveys or for contributing to an open-source software project.