what is cryptocurrency ?

A cryptocurrency is a digital or virtual currency that uses cryptography for security. This security feature makes the cryptocurrency difficult to be counterfeited.

It is a form of digital money that is designed to be secure and, in many cases, anonymous.

Listed below are some of its defining features:

  • Cryptocurrency makes it easier to transfer funds between two parties in any transaction, with a minimal processing fee.
  • It records and stores all its transactions on an online ledger known as the blockchain.
  • It uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. Hence it is very secure.
  • It has no physical form and is not redeemable for another commodity like gold.
  • Its supply is not determined by any central bank or authority and the network is completely decentralized, rendering it theoretically immune to government interference or manipulation.

It is a currency associated with the internet which uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.

Cryptography was born out of the need for secure communication in the Second World War. It has evolved in the digital era with elements of mathematical theory and computer science to become a way to secure communications, information, and money online.

The first cryptocurrency was bitcoin, which was created in 2009 and is still the best known. There has been a proliferation of cryptocurrencies in the past decade and there are now more than 1,000 of digital currency available on the internet. Bitcoin, Litecoin, Ethereum, Ripple are examples of cryptocurrencies.

 

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