Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. It operates on decentralized networks based on blockchain technology, which is a distributed ledger enforced by a network of computers (nodes). This decentralization makes cryptocurrencies resistant to central authority control and interference, such as that from governments or financial institutions.
Cryptocurrencies are designed to function as a medium of exchange, though their value can be highly volatile. They can be used for various purposes, including as a digital currency for transactions, investment assets, and sometimes for utility within specific platforms (e.g., tokens used for accessing services).
Bitcoin, created in 2009, was the first cryptocurrency and remains the most well-known. Since then, thousands of other cryptocurrencies have been developed, each with unique features and use cases. Common characteristics of cryptocurrencies include transparency, pseudonymity, and the ability to facilitate peer-to-peer transactions without intermediaries.
Overall, cryptocurrency represents a significant innovation in the financial landscape, offering new opportunities for decentralized finance, secure transactions, and alternative forms of wealth storage.