Cryptocurrency, often referred to as "crypto," is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by governments (fiat money), cryptocurrencies operate on technology called blockchain, which is a decentralized system spread across many computers. Here are some key points about cryptocurrency:
Key Features of Cryptocurrency
Decentralization:
Cryptocurrencies typically operate on a decentralized network of computers, known as nodes, rather than a single central authority like a bank or government.
Blockchain Technology:
Transactions are recorded on a blockchain, a public, distributed ledger. Each block contains a list of transactions, and once a block is completed, it is added to the chain in a linear, chronological order.
Cryptography:
Cryptocurrencies use cryptographic techniques to secure transactions, control the creation of new units, and verify the transfer of assets. This ensures the integrity and security of the transactions.
Pseudonymity:
Users can hold and transfer cryptocurrency without providing personal information, though transactions are traceable on the blockchain.
Global Accessibility:
Cryptocurrencies can be sent and received anywhere in the world, often with lower fees and faster transaction times compared to traditional banking systems.