1. Cryptography: The core of cryptocurrency technology is cryptography—or the use of mathematical techniques for secure communication in the presence of third parties. Cryptography is used to secure the transactions and to control the creation of new coins.
2. Blockchain: Blockchain is the underlying technology of cryptocurrency which uses the concept of a distributed ledger with a consensus among participants. A blockchain is a shared digital ledger that records transactions in a secure and immutable way. Every transaction is verified and recorded by all participants, making it tamper-proof and impossible to hack.
3. Mining: Cryptocurrency transactions must be verified by miners, who use specialized computers to solve complex algorithms and add the transactions to the blockchain. For their efforts, miners are rewarded with newly minted coins.
4. Wallets: A cryptocurrency wallet is an application or device that stores and manages a user’s cryptocurrencies. It stores the private and public keys needed to ensure secure access to the funds and acts as a gateway for carrying out transactions and managing an individual’s digital assets.