Cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.
Unlike fiat currencies, cryptocurrency does not have a central bank or a single administrator, and is instead managed and put into circulation by a community of users who participate in the so-called mining process.
Cryptocurrencies rely on a decentralized ledger system based on blockchain technology to operate. These accounts are stored on computers located around the world and are linked to each other via a secure form of peer-to-peer networking known as a Distributed Ledger Technology.
The use of cryptocurrency has grown steadily since its beginnings in 2009, when the first cryptocurrency, Bitcoin, was created. Since then, numerous cryptocurrencies have been created, with different characteristics and uses. Some of these popular cryptocurrencies include Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and Monero (XMR).
The use of cryptocurrency has also spawned a new economy, with businesses now accepting payments in various cryptocurrencies. This has in turn led to the rise of “cryptocurrency exchanges” – platforms where users can buy and sell their cryptocurrency in exchange for other digital assets or traditional currencies such as the US dollar.
Cryptocurrency is generally viewed as a more secure way to store and transfer value due to its decentralised and encrypted nature. However, the volatile nature of its values, as well as the high electricity costs associated with mining, have caused concerns over its use.
Nevertheless, the increasing use of cryptocurrency has led to it being regarded in some circles as a legitimate form of payment and as an interesting investment option.