Cryptocurrency is a form of digital or virtual money secured by cryptography, making counterfeiting or double-spending extremely difficult. Many cryptocurrencies operate on decentralized blockchain networks, which serve as distributed ledgers maintained by a network of computers. Unlike traditional currencies, cryptocurrencies aren’t issued by a central authority, making them theoretically resistant to government interference or manipulation.
Cryptocurrency is a digital asset that operates on a decentralized network across multiple computers, allowing it to function independently of central authorities.
Blockchain technology, which underpins cryptocurrencies, is expected to transform industries such as finance and law.
Benefits of cryptocurrency include faster and cheaper transactions and a decentralized system that reduces the risk of single-point failure.
Downsides include price volatility, high energy consumption for mining, and potential use in illegal activities.
Cryptocurrencies are digital payment systems powered by cryptographic technology, enabling secure transactions without relying on third-party intermediaries. The term “crypto” refers to the encryption methods used to secure transactions, such as:
Users can acquire cryptocurrencies through:
However, not all online retailers accept cryptocurrency payments. Despite this, cryptocurrencies—particularly Bitcoin—have gained popularity as trading assets due to their increasing market value. Additionally, they are sometimes used for cross-border transfers.
A core element of Bitcoin and other cryptocurrencies is blockchain technology. A blockchain is a series of connected blocks, each containing a record of verified transactions. Before a new block is added to the chain, every node (computer) in the network must validate and approve the transactions, making it nearly impossible to alter previous records.
Blockchain’s potential extends beyond cryptocurrency, with applications in:
Major financial institutions, such as JPMorgan Chase & Co., are exploring blockchain technology to enhance payment processing and reduce transaction costs.
