Unlike traditional currencies, where it's mostly the central banks that decide and create new money, the creation of new crypto coins is done directly in the encrypted and decentralized database of crypto itself.
In this database, all transactions and events are documented, stored, and sealed in individual blocks. These blocks are linked to each other in chronological order so that a blockchain is created. In a nutshell, the blockchain is a large database with histories of data records.
A few key details:
- A coin is a unit of value of a crypto and nothing more than a record of this blockchain.
- The blockchain also anonymously but publicly records who owned which coin at what time.
- The anonymization works via pseudonyms.