Page 36 - Banking Finance May 2022

ARTICLE

Control and verification of crypto account (AKA a public address) to another. To transfer funds
knowledge of a password (AKA a private key) associated
currency: with the account is needed. Transaction made between
Crypto currency is neither backed by any banks or peers is encrypted and then broadcast to the crypto
governments nor is it recognized as legal currency. Private currency's network and queued up to be added to the public
parties are able to use bit coin for transactions if agreed ledger. Transactions are then recorded on the public ledger
upon and it is also purchased and traded on exchange by via a process called mining.
investors.
All users of a given crypto currency have access to the
Three easy steps are there to verify Crypto currency. ledger if they choose to access it. The transaction amounts
Step 1: Note your transaction ID: After sending crypto are public by who has sent the transaction is encrypted. Each
currency from one wallet to another wallet. One receives a transaction leads back to a unique set of keys. Whoever owns
transaction ID. This transaction id represents a unique a set of keys, own the amount of crypto currency associated
"fingerprint" of transaction and allows transaction to be with those keys. Many transactions are added to a ledger
tracked. Make sure to save the transaction id. at once. These blocks of transactions are added sequentially
by miners. That is why the ledger and the technology behind
Step 2: Input Transaction ID into the Block chain: Different it are called "block" "chain". It is a "chain" of "blocks" of
crypto currency has their own block chain, which can be transactions.
accessed from as website. For Bit coin, one can track at
https://blockchain.info/.
How Cryptography works with crypto
Enter Transaction ID into the search field of the website and currency:
they can know the details of transactions. If one forgot to The keys that move balances around the block chain utilize
copy or save Transaction ID the he can search by using a type of one way cryptography, called public key
exchange or wallet address. cryptography. The "hashes" (the one way cryptographic
codes that tie together blocks on the block chain) use a
Step 3: Check the status of transaction & verify its details: similar type of cryptography. Meanwhile transaction data
All the details regarding transaction will show after entering sent and stored on the block chain is tokenized (tokenization
the transaction id. One can verify the details of transaction is a type of one way cryptography that points to data but
and check its status. doesn't contain all the original data).

Number of Crypto currency: The key to understanding these layers of encryption which

There are more than four thousand crypto currencies of ensure a system like Bit coin's ( Some coins work a little
which some has very little volume of transactions. Some of differently) is found in one way cryptographic functions(
important crypto currency include Bit coin, Ethereum,
Litecoin, cardano etc. Most of the Crypto currency is not
linked to an asset but some are stable linked to as asset like
US dollar or basket of currencies. Many countries have
legalized the Crypto currency like Morocco, Nigeria,
Namibia, United States etc. China is also developing a crypto
currency called digital Yuan, so called central bank digital
currency that aims to replace some of the cash in
circulation.

Transactions through Crypto currency:
Transactions are sent between peers using software called
crypto currency wallets. The person creating the transaction
uses the wallet software to transfer balances from one

36 | 2022 | MAY | BANKING FINANCE