What is Cryptocurrency?":
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**What is Cryptocurrency?**
Cryptocurrency is a digital or virtual form of currency that uses cryptography for security. Unlike traditional currencies issued by governments and central banks, cryptocurrencies operate on decentralized networks based on blockchain technology.
Here are key features that define cryptocurrencies:
**Decentralization:**
Cryptocurrencies operate on decentralized networks using blockchain technology. This means there is no central authority or government controlling the currency, making transactions more transparent and resistant to censorship.
**Cryptography:**
Security is a fundamental aspect of cryptocurrencies. Cryptography is used to secure transactions and control the creation of new units. Public and private keys are employed to facilitate secure and verifiable transactions.
**Blockchain Technology:**
Blockchain is a distributed ledger that records all transactions across a network of computers. It ensures transparency and immutability of transaction history. Each block in the chain contains a list of transactions, and once added, it cannot be altered.
**Decentralized Control:**
Decentralized control is a core principle of cryptocurrencies. No single entity or government has control over the entire network. Changes to the cryptocurrency protocol usually require consensus among network participants.
**Limited Supply:**
Many cryptocurrencies have a capped supply to control inflation. For example, Bitcoin has a maximum supply of 21 million coins. This scarcity is intended to mimic precious metals like gold and can impact the value of the cryptocurrency over time.
Cryptocurrencies, with Bitcoin being the first and most well-known, have gained popularity for various reasons, including their potential as a store of value, a medium of exchange, and a means for borderless and permissionless transactions.
While the cryptocurrency space offers exciting opportunities, it's essential for users to understand the risks and conduct thorough research before engaging in cryptocurrency transactions or investments.
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