Cryptocurrency

Cryptocurrency is a digital or virtual form of currency that uses cryptography for security. Unlike traditional currencies issued by governments (such as dollars or euros), cryptocurrencies operate on decentralized networks based on blockchain technology, which is a distributed ledger enforced by a network of computers (nodes).

The defining features of cryptocurrencies include their decentralized nature, which allows for peer-to-peer transactions without the need for intermediaries like banks; the use of encryption techniques that secure transaction data and control the creation of new units; and the ability to operate on transparent networks where transaction records are accessible to all participants.

Bitcoin, created in 2009, is the most widely recognized cryptocurrency, but thousands of alternative cryptocurrencies exist, each with unique features and use cases. Cryptocurrencies can serve various purposes, including as a medium of exchange, a store of value, or a means of raising capital (as seen in Initial Coin Offerings, or ICOs). They can also facilitate decentralized applications (dApps) and smart contracts on blockchain platforms.

Overall, cryptocurrencies represent a significant innovation in finance and digital technology, with implications for economic systems, individual privacy, and the nature of trust and accountability in transactions.