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- Herausgeber: L'Oliveto Publisher
- Kategorie: Fachliteratur
- Sprache: Englisch
Cryptocurrencies for Beginners: An Essential Guide to Getting Started is a comprehensive and accessible work that guides the reader through the fascinating and complex world of cryptocurrencies. Aimed at those who are new to this field, as well as those who wish to consolidate their knowledge, this guide explores every essential aspect of the cryptocurrency market, offering a clear and structured path to understanding and investing in these innovative digital assets.
The book is divided into ten chapters, each of which delves into crucial topics for those who want to approach the world of cryptocurrencies with awareness and security:
Introduction to Cryptocurrencies: This chapter introduces readers to the fundamental concepts of cryptocurrencies, explaining what they are, how they came about, and why they are revolutionizing the world of finance and technology.
How Cryptocurrencies Work: The second chapter takes an in-depth look at how cryptocurrencies work, explaining blockchain technology, consensus mechanisms such as Proof of Work and Proof of Stake, and the mining process in simple yet detailed detail.
Wallets and Security: Security and protection are key issues in the world of cryptocurrencies. This chapter provides a comprehensive guide to the different types of wallets (digital wallets), how to keep them secure, and best practices for protecting one's cryptocurrencies from external threats.
Introduction to Cryptocurrency Trading: For those interested in trading, this chapter provides an overview of the basics of cryptocurrency trading, including common strategies, technical and fundamental analysis, and tips on how to start trading safely and effectively.
Security in Cryptocurrencies: Extending the notions of security, this chapter explores in detail the most common threats in the cryptocurrency sector, such as phishing, hacker attacks, and scams, offering practical tips to avoid them.
Cryptocurrencies and Market Analysis: Strategies for Making Informed Decisions: Here we get to the heart of investment strategies, with a focus on market analysis. The chapter covers technical analysis, fundamental analysis, and how to combine these techniques to make informed, informed decisions.
Cryptocurrencies and Regulation: Navigating the Legal Landscape: This chapter addresses the important topic of regulation, exploring the global laws and regulations that affect the cryptocurrency market. Readers will learn how to navigate an ever-changing regulatory environment and how to remain compliant with their country's laws.
Cryptocurrencies and Exchange Platforms: How to Choose and Use the Best Exchanges: A comprehensive guide to choosing and using cryptocurrency exchange platforms (exchanges). The chapter explores the different types of exchanges, criteria for choosing the right one, and best practices for trading safely.
Cryptocurrencies and Investments: Strategies to Diversify Your Portfolio: Diversification is a key strategy for risk management. In this chapter, readers will discover how to build a diversified cryptocurrency portfolio, exploring different asset classes and advanced strategies to balance risk and return.
Long-Term Planning Strategies and Adapting to Change in the World of Cryptocurrency: The last chapter is dedicated to long-term planning and the importance of remaining flexible and adaptable in an ever-changing market. It explores how to maintain security, manage risk, and adapt one's strategy in response to market changes and new opportunities.
Conclusion: Cryptocurrencies for Beginners is not only a practical guide to begin investing in cryptocurrencies, but also a handbook that provides an in-depth understanding of the industry. Readers are guided through every critical aspect of investing in cryptocurrencies, with the aim of providing them with the knowledge and tools they need to safely and successfully navigate this fascinating world. Whether you are a complete beginner or someone looking to deepen your knowledge, this book is an indispensable resource for your journey into the world of cryptocurrencies.
Das E-Book können Sie in Legimi-Apps oder einer beliebigen App lesen, die das folgende Format unterstützen:
Veröffentlichungsjahr: 2025
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Cryptocurrencies for beginners
Definitive guide to getting started in the fascinating and complex world of cryptocurrencies
Definitive guide to getting started in the fascinating and complex world of cryptocurrencies
Index
Chapter 1: Introduction to Cryptocurrencies
Chapter 2: How Cryptocurrencies Work
Chapter 3: The Main Cryptocurrencies
Chapter 4: Getting Started with Cryptocurrencies
Chapter 5: Cryptocurrency and Security: Protecting Your Investments
Chapter 6: Cryptocurrencies and Market Analysis: Strategies for Making Informed Decisions
Chapter 8: Cryptocurrencies and Exchange Platforms: How to Choose and Use the Best Exchanges
Chapter 9: Cryptocurrencies and Investments: Strategies for Diversifying Your Portfolio
Chapter 10: Long-Term Planning Strategies and Adaptation to Change in the Cryptocurrency World
Chapter 1: Introduction to Cryptocurrencies
Cryptocurrencies have become a topic of growing interest in recent years, fascinating investors, technologists and the general public. But what exactly are cryptocurrencies? At the most basic level, a cryptocurrency is a form of digital money designed to be secure and, in most cases, anonymous. It works thanks to a technology called blockchain, which is essentially a digital ledger shared across multiple computers, designed to record transactions in a secure and immutable manner.
The term 'cryptocurrency' is derived from the combination of the words 'cryptography' and 'currency'. Cryptography is a branch of mathematics and computer science that deals with the protection of information through the use of codes and digits. In cryptocurrencies, cryptography is used to secure transactions, control the creation of new units and verify the transfer of assets. This security is one of the reasons why cryptocurrencies have gained popularity, especially at a time when trust in traditional financial institutions has been tested.
Unlike traditional currencies, such as the euro or the dollar, cryptocurrencies do not exist in physical form. There are no banknotes or coins to handle, nor is there a central authority, such as a central bank, that controls their production and distribution. Cryptocurrencies are decentralized, which means that their operation is not supervised by a central entity. This represents a radical change from traditional financial systems and raises many questions about how cryptocurrencies could reshape the future of the global economy.
In addition, cryptocurrencies are often characterized by a limited supply, planned since their creation. For example, Bitcoin, the most popular cryptocurrency, has a maximum supply of 21 million units. This limit is written into the code of the Bitcoin network and cannot be changed without the consent of the majority of the network's participants. This programmed scarcity is one of the elements that contributes to the value of cryptocurrencies and further differentiates them from traditional currencies, which can be printed in theoretically unlimited quantities by central banks.
Cryptocurrencies are not only instruments of investment or speculation, but also represent a new paradigm in the digital economy. They offer the possibility of transferring value directly between two parties anywhere in the world, without the need for intermediaries such as banks. This could revolutionize the way we think about payments and financial transactions, making them faster, cheaper and more globally accessible.
Of course, with innovation also comes uncertainty. Cryptocurrencies are still a young and evolving field, with many aspects yet to be fully understood and regulated. However, growing interest and increasing adoption suggest that cryptocurrencies are set to play a significant role in the future of the economy.
To fully understand the impact of cryptocurrencies, it is useful to briefly review their history, which, although relatively recent, has been characterized by rapid developments and significant innovations. The history of cryptocurrencies began in 2008, at a time of global financial crisis, with the publication of a scientific paper that would change the course of finance and technology.
That paper, entitled 'Bitcoin: A Peer-to-Peer Electronic Cash System', was published by an individual or group of individuals under the pseudonym Satoshi Nakamoto. In the paper, Nakamoto described an electronic payment system that allowed payments to be sent and received without the need for a trusted third party, such as a bank. The idea was to create a decentralised currency, not subject to the control of governments or financial institutions, that could be transferred directly between users via the Internet.
In January 2009, Nakamoto released the first Bitcoin software and generated the first 50 Bitcoins, an event known as the 'Genesis Block'. This was the first block ever created on the Bitcoin blockchain and represented the beginning of the cryptocurrency network. The software was open-source, meaning that anyone could view the code, contribute to the project and participate in the Bitcoin network.
In the beginning, Bitcoin mainly attracted the attention of technology and cryptography enthusiasts. However, over time, the concept of digital currency began to spread, especially among those who were looking for alternatives to traditional financial systems. In the early years, the value of Bitcoin was extremely volatile, varying from a few cents to several dollars per unit.
A turning point in the history of cryptocurrencies occurred in 2010, when a programmer named Laszlo Hanyecz made the first known commercial transaction using Bitcoin. He bought two pizzas for a total of 10,000 Bitcoins, an event that is now celebrated as 'Bitcoin Pizza Day'. If valued at today's price, those 10,000 Bitcoins would be worth millions of dollars, but at the time they demonstrated the potential of cryptocurrencies as a medium of exchange.
After Bitcoin, many other cryptocurrencies, commonly known as 'altcoins', emerged. Some of these, such as Litecoin and Ethereum, introduced significant innovations. Ethereum, launched in 2015 by Vitalik Uterini, expanded the use of the blockchain by allowing the creation of 'smart contracts' or smart contracts, which are self-executing programs that automate transactions according to pre-defined rules. This innovation paved the way for a new era of decentralised applications, known as 'dApps'.
Over the years, interest in and adoption of cryptocurrencies has grown exponentially. The market has become more mature, with an increasing number of institutional investors and governments beginning to explore and regulate this new sector. In addition, numerous exchange platforms have sprung up, making it easier for the public to buy, sell and hold cryptocurrencies.
Despite their short history, cryptocurrencies have already had a significant impact on the world. They have challenged traditional concepts of money, trust and transactions, and introduced a new way of thinking about the global economy. As we continue to explore and understand the potential of cryptocurrencies, it is clear that they represent one of the most important technological innovations of the 21st century.
Why cryptocurrencies are important
Cryptocurrencies have become increasingly central to the global economic landscape, and their importance can be understood by analyzing several factors that make them unique and potentially revolutionary. Although still considered by many as a risky investment or a passing fad, cryptocurrencies offer a number of advantages that are attracting a growing number of users, companies and institutions.
One of the most important aspects of cryptocurrencies is their decentralisation. Unlike traditional currencies, which are issued and controlled by governments' central banks, cryptocurrencies operate on a decentralised computer network. This means that no single entity has total control over them. This feature reduces the risk of manipulation by governments or financial institutions, making cryptocurrencies particularly attractive in countries with unstable economies or authoritarian regimes.
Another key factor is the transparency and security offered by blockchain technology. Every transaction made with a cryptocurrency is recorded on a public and immutable ledger, which makes it extremely difficult to counterfeit or double spend. The transparency of the blockchain also offers greater trust in the system, as anyone can independently verify transactions. This inherent security is one of the reasons why cryptocurrencies have been adopted in sectors such as finance, healthcare and logistics, where traceability and transparency are essential.
Cryptocurrencies also offer a new form of financial inclusion. In many parts of the world, billions of people do not have access to traditional banking services due to economic, geographical or political barriers. Cryptocurrencies, however, can be used by anyone with an Internet-connected device, regardless of their geographical location or economic status. This has the potential to significantly reduce the economic divide and offer new opportunities to those excluded from the traditional financial system.
Another key aspect of cryptocurrencies is the possibility of reducing transaction costs. Traditional financial systems often involve high fees for transferring money, especially internationally. Cryptocurrencies, in contrast, allow for significantly lower transaction costs, with the ability to send money around the world in minutes or even seconds. This has made cryptocurrencies particularly popular among migrant workers who send remittances to their home countries, reducing the fees associated with these transactions.
In addition, cryptocurrencies are stimulating innovation in finance and technology. With the advent of cryptocurrencies, new forms of decentralised finance (DeFi) have emerged that offer services such as loans, insurance and trading without the need for intermediaries. This decentralised finance model not only reduces costs, but also increases access to these services, making them available to a wider segment of people.
Finally, cryptocurrencies represent an attractive alternative to traditional investments. Many investors see cryptocurrencies as an opportunity to diversify their portfolios, seeking to hedge against inflation or stock market volatility. Although investments in cryptocurrencies are risky and subject to significant price fluctuations, some have seen substantial returns, further fueling interest in this emerging market.
In summary, cryptocurrencies are important because they offer an alternative to traditional financial systems, promote financial inclusion, reduce transaction costs and incentivize innovation. Although there are still many challenges ahead, such as regulation and security, it is clear that cryptocurrencies are set to play a crucial role in the future of the global economy.
Difference between cryptocurrencies and traditional currencies
To fully understand the potential of cryptocurrencies, it is crucial to know the main differences between these new forms of digital money and traditional currencies such as the euro, dollar or yen. Although both types of currency function as a medium of exchange, store of value and unit of account, cryptocurrencies and traditional currencies operate on fundamentally different principles, which have significant implications for their adoption and use.
1. Centralization vs Decentralisation
The most obvious and significant difference between cryptocurrencies and traditional currencies lies in the structure of control. Traditional currencies are issued and regulated by a central bank, which acts as the controlling authority, deciding monetary policy, interest rates, and the amount of money in circulation. This centralization allows governments to manage the economy, but also carries the risk of manipulation or abuse of power, such as uncontrolled inflation or devaluations.
Cryptocurrencies, on the contrary, are decentralised. No single entity has control over them. Instead, their management is distributed among all participants in the network, through consensus mechanisms such as proof of work or proof of stake. This decentralisation reduces the risk of manipulation by a central entity and makes the system more resilient to external censorship or interference.
2. Creation and Offer
The creation of traditional currencies is in the hands of central banks, which can issue new notes and coins according to the economic needs of the country. This process can lead to an increase in the money supply, affecting inflation and the purchasing power of the currency itself.
Cryptocurrencies, on the other hand, are often created through a process known as mining, which involves network computers solving complex mathematical problems. The supply of many cryptocurrencies, such as Bitcoin, is limited and predetermined by the code that governs their blockchain. For example, there will only be 21 million Bitcoins in circulation, and this programmed scarcity is one of the elements that contributes to the value of cryptocurrency.
3. Transparency and Anonymity
Transactions in traditional currencies, although digitized, are generally recorded and monitored by financial institutions, which can track and report suspicious transactions. This system offers a certain level of security, but also reduces the privacy of users.
Cryptocurrencies, in particular Bitcoin, offer a very different level of transparency and anonymity. Although all transactions are publicly recorded on the blockchain, participants' identities are masked by pseudonyms (alphanumeric addresses). This balance between transparency of transactions and anonymity of identities offers a new dimension of privacy, which is particularly appreciated in contexts where the protection of financial privacy is crucial.
4. Transferability and Boundaries
Traditional currencies are generally limited by national borders and regulations governing their use. International currency transfers are often subject to long waits, high transaction costs, and complex legal and tax procedures.
Cryptocurrencies, on the other hand, are not tied to any country or border. They can be transferred instantly and directly between two parties anywhere in the world, without the need for intermediaries such as banks or credit institutions. This makes cryptocurrencies particularly useful for international transactions, especially in regions with underdeveloped or unstable banking systems.
5. Confidence in the System
The use of traditional currencies is based on trust in the banking system and the government that issues them. This trust can be undermined by economic crises, mismanagement or corruption.
Cryptocurrencies, on the other hand, are based on trust in mathematics, cryptography and the open-source code that supports them. Since the rules governing cryptocurrencies are written into their code and distributed throughout the network, trust is rooted in the transparency and immutability of the system, rather than the reliability of a central entity.
Introduction to blockchain
To fully understand cryptocurrencies, it is essential to have a clear understanding of the technology that makes them possible: the blockchain. The blockchain is the beating heart of cryptocurrencies, and its technological innovation is what allows cryptocurrencies to function in a secure, transparent and decentralised manner.
What is a blockchain?
The blockchain, literally 'chain of blocks', is a distributed digital ledger that stores a list of transactions in a secure and transparent manner. Each transaction made with a cryptocurrency is recorded in a blockchain, which is then added to a blockchain, thus forming a long chronological sequence of transactions. One of the key features of the blockchain is that it is immutable, which means that once a block has been added to the chain, it cannot be altered or deleted without the network's consent.
The blockchain operates through a network of nodes, which are computers that participate in the management and verification of transactions. Each node has a complete copy of the blockchain and participates in the validation process of transactions through consensus algorithms, such as proof of work or proof of stake. This distributed system is what makes the blockchain secure: there is no single point of failure, and the entire network must agree before a new transaction can be added to the blockchain.
How does a blockchain transaction work?
When one person sends cryptocurrency to another, the transaction is first transmitted to the network of nodes. The nodes verify that the sender has the necessary funds and that the transaction is valid. This verification is a complex process that uses cryptography to ensure the integrity of the transaction. Once verified, the transaction is included in a new block, which is then added to the blockchain through the mining or validation process.
Mining is the process by which network nodes compete to solve a complex mathematical problem. The first node that succeeds in solving the problem has the right to add the block to the blockchain and is rewarded with new units of the cryptocurrency. This mechanism not only incentivizes participants to keep the network secure, but also ensures that the creation of new blocks takes place in a controlled and distributed manner.
Once the block has been added to the blockchain, the transaction is considered complete and becomes part of the immutable ledger. All nodes update their copy of the blockchain to reflect the addition of the new block, and the recipient can see that the funds have been received.
The properties of blockchain
The blockchain has several key properties that make it a revolutionary technology:
Decentralisation: the blockchain is managed by a distributed network of nodes, rather than by a central entity. This eliminates the risk of censorship, manipulation or system failure.
Security: Thanks to advanced cryptography and the decentralised structure, the blockchain is extremely secure. Transactions are verifiable and immutable, making fraud almost impossible.
Transparency: Every transaction recorded on the blockchain is visible to all participants in the network. This level of transparency increases trust in the system and makes it more difficult for fraudulent behavior to occur.
Immutability: Once a block has been added to the blockchain, it cannot be modified or deleted. This ensures the historical integrity of transactions and makes the blockchain a trusted ledger.
Resilience: Since the blockchain is distributed over thousands of nodes worldwide, it is highly resistant to failures or attacks. Even if a part of the network were to be compromised, the system would continue to function without interruption.
The use of blockchain beyond cryptocurrencies
Although the blockchain began as the underlying technology for cryptocurrencies, its applications have rapidly expanded to many other areas. Today, blockchain is used for everything from supply chain management to voter registration, from asset tracking to the implementation of smart contracts. The ability of blockchain to provide a secure, transparent and immutable ledger makes it a potentially revolutionary technology in any field that requires trust and verification.
In conclusion, blockchain represents more than just a technological innovation; it is a new infrastructure for trust and transparency in an increasingly digital and decentralised world. Understanding blockchain is crucial to understanding the future not only of cryptocurrencies, but of the entire global technological and economic landscape.
Chapter 2: How Cryptocurrencies Work
Blockchain technology
In the previous chapter, we introduced the concept of blockchain and explained its fundamental role in the functioning of cryptocurrencies. Now, we will elaborate on how blockchain technology, combined with other technological elements, makes the existence and operation of cryptocurrencies possible. Although the blockchain is the core, it is not the only component of this complex and innovative ecosystem.
The blockchain as a distributed ledger
As mentioned, the blockchain is a distributed ledger, which means that it is not controlled by a single entity, but is maintained by a network of computers called nodes. Each node in the network keeps a complete and up-to-date copy of the transaction ledger, thus ensuring that all information is transparent and accessible to all participants.
The decentralisation of blockchain offers several advantages over traditional centralized systems. First of all, it eliminates the risk of a single point of failure. In a centralized system, if the server hosting the ledger is compromised, all information can be corrupted or lost. In a blockchain system, on the other hand, since the information is distributed over thousands of nodes, it is virtually impossible for all copies of the ledger to be compromised at the same time.
The consensus mechanism: proof of work and proof of stake
A crucial aspect of blockchain functioning is the consensus mechanism, which allows all nodes in the network to agree on the transactions to be added to the blockchain. The most common and widespread consensus mechanism is proof of work (PoW), used by Bitcoin and many other cryptocurrencies. In PoW, miners compete to solve a complex mathematical problem, and the first to solve it gets the right to add the new block to the blockchain. This process requires a large amount of computational power and, consequently, electricity, which has raised concerns about the environmental impact of mining.
An alternative to PoW is proof of stake (PoS), a consensus mechanism that is gaining popularity and is used by cryptocurrencies such as Ethereum (in its updated version, Ethereum 2.0). In PoS, validators are chosen semi-randomly based on the amount of cryptocurrency they hold and are willing to 'block' as collateral. This process requires less energy than PoW and offers a different security model, based on the economic incentive of participants to keep the network secure.
Transactions and validation
Every transaction made with a cryptocurrency is sent to the network of nodes for validation. Validation involves verifying that the sender actually has the necessary funds to carry out the transaction and that the transaction has not been altered or duplicated. Once verified, the transaction is grouped with other transactions to form a new block, which is then added to the blockchain.
The validation process varies depending on the cryptocurrency and the consensus mechanism used. However, the ultimate goal is always the same: to ensure that all transactions are legitimate and that the blockchain remains consistent and secure.
Smart contracts and decentralised applications
One of the most interesting developments in the field of cryptocurrencies is the introduction of smart contracts, smart contracts that are executed automatically when certain predefined conditions are met. Smart contracts are executed on the blockchain and offer a new way of automating and decentralizing transactions and business operations.
Ethereum is the best-known platform for executing smart contracts. Using its Turing-complete programming language, developers can create decentralised applications (dApps) that run on Ethereum's blockchain. These dApps range from games to lending platforms, from insurance to intellectual property management, and are opening up new frontiers in the use of blockchain technology.
Conclusions
Blockchain technology is complex but offers a wide range of possibilities that are transforming not only the world of cryptocurrency, but also sectors such as finance, logistics, healthcare and many others. Understanding how blockchain and consensus mechanisms work is crucial for anyone who wants to explore or invest in cryptocurrencies.
Mining and consensus
Mining is a fundamental process in the world of cryptocurrencies, especially for those using the proof-of-work (PoW) consensus mechanism. This process not only validates transactions and adds them to the blockchain, but is also how new units of cryptocurrency are created and introduced into the system.
What is mining?
Mining, in the context of cryptocurrencies, is the process of solving complex mathematical problems that require enormous computational power. Computers participating in this process, called miners, compete to be the first to solve the problem and, once found, add a new block of transactions to the blockchain. As a reward for their efforts, the miners receive a predetermined amount of cryptocurrency, known as a 'block reward'.
Mining performs two crucial functions in the cryptocurrency network:
It ensures that transactions are verified and legitimate, preventing double spending.
It introduces new cryptocurrencies into the system, incentivizing miners to keep the network secure and operational.
How does mining work?
The mining process starts when a transaction is made on the network of a cryptocurrency. This transaction, along with many others, is collected in a block. The block is then distributed to the miners, who try to solve a complex cryptographic problem based on hash functions. The problem is designed to be difficult to solve but easy to verify once solved.
Miners must find a number called a 'nonce' which, when combined with the block data and submitted to the hash function, produces a result that meets certain criteria (e.g. a number of leading zeros in the hash result). This process requires multiple attempts, as the correct nonce is found primarily through trial and error.
The first miner to find the correct solution sends the block to the network, where other nodes verify it. If the solution is correct and valid, the block is added to the blockchain, and the miner receives the block reward along with the associated transaction fees.
Mining difficulties and adaptation
One of the most interesting aspects of mining is the automatic adjustment of difficulty. As more miners participate in the network and the total computational power (called hash rate) increases, the difficulty of mining problems is automatically increased to keep the time needed to mine a new block constant. In the case of Bitcoin, for example, the average time to find a new block is about 10 minutes.
This adaptation mechanism is crucial for maintaining network stability and ensuring that new blocks are added at regular intervals, regardless of the number of active miners.
The cost of mining
Mining requires a significant upfront investment in specialized hardware, known as ASICs (Application-Specific Integrated Circuit), and incurs significant operating costs, particularly for electricity. This high energy demand has led to debates about the environmental impact of mining, with some cryptocurrencies exploring more sustainable alternatives such as proof-of-stake.
Consensus in the network
Mining is closely linked to the concept of consensus in the cryptocurrency network. Consensus refers to the process by which all nodes in the network agree on the validity of transactions and the correct sequence of blocks in the blockchain. In proof of work, consensus is achieved through mining, where miners compete to solve problems and add blocks to the blockchain.
However, there are other consensus mechanisms besides proof of work, such as proof of stake (PoS), which is gaining popularity due to its greater efficiency. In PoS, validators are chosen based on the amount of cryptocurrency they possess and are willing to put into play (staking). This reduces the need for high computational power and makes the consensus process more sustainable.
Conclusions
Mining and consensus are key elements in the functioning of cryptocurrencies. While mining continues to play a crucial role in proof-of-work networks, the evolution towards alternative consensus mechanisms such as proof of stake could significantly change the cryptocurrency landscape in the coming years. Understanding these processes is essential for anyone who wants to learn more about how cryptocurrencies work and their long-term sustainability.
Cryptocurrency transactions
Cryptocurrency transactions represent one of the most important and distinctive aspects of this new digital monetary system. Understanding how transactions take place, what their main components are, and what the implications of a cryptocurrency transaction are is crucial for anyone who wants to use or invest in cryptocurrencies.
Structure of a transaction
A cryptocurrency transaction is essentially an exchange of value between two parties, but unlike traditional transactions, it does not involve intermediaries such as banks or financial institutions. A typical cryptocurrency transaction contains three main components:
Input: Represents the address(es) from which the funds originated. The input indicates which previous transaction the cryptocurrency used in the current transaction came from.
Output: Indicates the address(es) to which the funds are sent. The output specifies the amount the recipient will receive.
Amount: This is the value of the cryptocurrency that is transferred from the sender to the recipient.
Each transaction is digitally signed by the sender using his private key, which ensures that only the legitimate owner of the funds can authorize the transaction. The digital signature is then verified by the network nodes during the validation process.
The role of addresses
Cryptocurrency addresses function similarly to bank account numbers. Each user has one or more public addresses, which can be shared with others to receive funds. Each address is associated with a private key, which must be kept secret, as anyone possessing it can control the funds associated with the address.
Addresses are generally represented by alphanumeric strings that may seem complex, but thanks to services such as QR codes, sending and receiving cryptocurrencies has become relatively simple even for the less experienced.
Transaction fees
Cryptocurrency transactions may include a transaction fee, which is paid to miners (or validators, in the case of proof of stake) as a reward for validating and including the transaction in a block. The transaction fee is not mandatory, but a higher fee increases the likelihood of the transaction being quickly included in a block, as miners tend to priorities transactions with higher fees.
Transaction fees vary depending on the cryptocurrency and network conditions. During periods of high congestion, fees can rise significantly, making transactions more expensive.
Confirmations and transaction times
Once a transaction is included in a block and added to the blockchain, it is considered confirmed. However, the complete confirmation of a transaction may require more than one block. For example, in the case of Bitcoin, it is generally recommended to wait for at least six confirmations (six blocks added to the blockchain after the block containing the transaction) to be sure that the transaction is irreversible.
