Cryptocurrency is a digital currency that operates independently of banks and financial institutions. It uses cryptographic technology for secure transactions and is recorded on a decentralized digital ledger called blockchain. This system has transformed the finance industry by providing new ways to transact, invest, and store value.
Cryptocurrency is different from traditional currency in that it is not controlled by any central authority and derives its value from market demand rather than trust in a government. Cryptocurrencies like Bitcoin and Ethereum operate on their own blockchains, while tokens are created on existing blockchains. Mining and hard forks are key methods by which cryptocurrencies are created.
While crypto offers advantages such as privacy, global accessibility, and secure investment, it also comes with risks like volatility and security threats. Understanding blockchain technology is crucial, as it ensures the integrity and security of cryptocurrency transactions.
