What is Cryptocurrency?

Cryptocurrency is a form of digital or virtual currency that uses cryptography for security. Unlike traditional money issued by governments (fiat currency), cryptocurrencies are decentralized and typically operate on blockchain technology—a distributed ledger enforced by a network of computers (nodes).

The most well-known cryptocurrency is Bitcoin, created in 2009. Since then, thousands of cryptocurrencies have emerged, each with unique features and purposes. Popular examples include Ethereum, which enables smart contracts, and stablecoins, which are pegged to traditional assets like the US dollar.

Key Characteristics

• Decentralization: No central authority controls the network.


• Security: Transactions are secured by cryptographic algorithms.


• Transparency: All transactions are recorded on a public ledger (blockchain).


• Global Access: Anyone with an internet connection can participate.
  

Cryptocurrencies can be used for payments, investments, remittances, and powering decentralized applications. However, they are also subject to price volatility and regulatory scrutiny. Understanding how cryptocurrencies work is essential before investing or using them.