How does digital currency | digital wallet | Encryption in blockchain work ?

With digital currency value is represented as a coin , transactions are stored in distributed ledger called the blockchain. A distributed ledger is a sort of giant excel spreadsheet that is recording all the transactions that are happening.
The blockchain records all transactions , like a bank statement , but with a few differences.
In the traditional system the record of transactions is maintained by the bank and you can only see transactions related to your account or your money.

Blockchain :

With a digital currency , this record is public and every computer or node connected to that network , maintains its own complete & public copy of all transactions. Since the system is open and public , anyone who is able to connect to the network via internet is able to retrieve a copy of blockchain.

Digital wallet in blockchain :

• Coins are stored in a digital wallet.
• Digital wallet cointains the address to receive coins.
• Coins will show in digital wallet balance.
• Sending coins generates a transaction message in the blockchain 

Encryption in blockchain:

Encryption is a process that makes the information  unreadable to humans.It is only possible to make it readable if you have a appropriate key to unlock encryption through a process called decryption. Encryption is everywhere, it is used to protect and secure data.

" Digital currency use a process called 'public key cryptography or encryption' "

Network security in blockchain :

• Transaction message contain a signature.
• Signature is a part of encryption process that proves that someone has the private key.
• This is done through mathematical process called hashing more commonly called mining. 
• Signature is unique for every transaction.
• Nodes on the network would reject a transaction where the signature and message did not match.
• It is this network power that secure a digital currency and make it infeasible to hack blockchain.

How is digital currency created?

• Coins are created through a competitive process called mining.
• Mining is the process of using computing power to process transactions and secure the network againts threats and reversal.
• Individual nodes compete to find the solution to mathematical problem in order to verify transactions.
• When a node find a solution to one of these problems and a transaction is verified and added to blockchain the node that found the solution is awarded coins for their work.
• Digital currency have finite number of coins in their system, the number of coins is defined at creation of the digital currency and the numbers of coins cannot be changed.