Cryptocurrency

Cryptocurrency refers to a type of digital or virtual currency that utilizes cryptography for security. Unlike traditional currencies issued by governments (like the US dollar or the euro), cryptocurrencies operate on decentralized networks based on blockchain technology. A blockchain is a distributed ledger enforced by a network of computers (often referred to as nodes), which records all transactions across multiple systems, ensuring transparency and security.

Cryptocurrencies are characterized by their decentralized nature, which means they are not controlled by any central authority, such as a government or financial institution. This inherent feature offers advantages like resistance to censorship and the potential for financial inclusion. Bitcoin, created in 2009, is the first and most widely recognized cryptocurrency, but thousands of other cryptocurrencies have been developed since, each with varying features and technologies, such as Ethereum, Ripple, and Litecoin.

Cryptocurrencies can be used for various purposes, including digital transactions, investment, and as a store of value. However, they are also associated with high volatility and regulatory scrutiny in many countries, leading to ongoing discussions about their legality and potential impacts on traditional financial systems.