Cryptocurrency is a digital or virtual currency secured by cryptography. Unlike traditional money issued by governments, cryptocurrencies operate on decentralized, peer-to-peer networks using blockchain technology.
This means there is no central authority like a bank controlling it. Transactions happen directly between users across borders, making crypto useful for online payments and as an investment asset.
Blockchain is a decentralized and public digital ledger that records transactions across a network of computers. It ensures transparency and security because data cannot be easily altered.
Cryptocurrencies are not controlled or issued by any government or central bank. This reduces dependence on intermediaries.
Advanced encryption techniques secure transactions and control the creation of new cryptocurrency units.
Mining is the process of validating transactions and adding them to the blockchain. Miners receive rewards in cryptocurrency tokens.
Wallets are digital tools that store private keys. These keys allow users to send, receive, and access their cryptocurrency securely.
When a user sends cryptocurrency, the transaction is verified by network computers (nodes) and permanently recorded on the blockchain.
You do not own a physical coin. You own a private key that gives you control over your digital assets.
Cryptocurrency prices can fluctuate significantly. This creates opportunities for profits but also risk of losses.
Blockchain technology is secure, but user wallets can be hacked if not properly protected. Losing private keys means losing access to funds permanently.
Cryptocurrency regulations vary by country. In many places, crypto is considered a taxable asset.
Cryptocurrency is transforming the financial world by enabling decentralized, transparent, and borderless transactions. However, it carries risks and requires proper understanding before investing.