Cryptocurrency

Cryptocurrency is a digital or virtual form of currency that utilizes cryptography for security. Unlike traditional currencies issued by governments (such as the US dollar or the euro), cryptocurrencies operate on decentralized networks based on blockchain technology. A blockchain is a distributed ledger that records all transactions across a network of computers, ensuring transparency and security.

Cryptocurrencies are characterized by their pseudo-anonymous nature, enabling users to conduct transactions without disclosing their identities. Each unit of cryptocurrency, such as Bitcoin or Ethereum, is created through a process called mining, which involves solving complex mathematical problems to validate and record transactions on the blockchain.

The supply of most cryptocurrencies is limited, creating scarcity, which can affect their value. Cryptocurrencies can be used for various purposes, including as a medium of exchange, a store of value, or an investment vehicle. They may also enable smart contracts and decentralized applications (dApps) in more advanced platforms like Ethereum.

Overall, cryptocurrencies represent a novel financial paradigm, challenging traditional financial systems and offering new opportunities for users worldwide.