Cryptocurrency

What is Cryptocurrency?

A digital or virtual form of currency that uses cryptography for security. It operates on decentralized networks based on blockchain technology, which ensures transparency, security, and the prevention of double-spending. At the core of every cryptocurrency is a blockchain – a distributed ledger that records all transactions in a secure, transparent, and immutable manner. Each transaction is verified through consensus algorithms such as Proof of Work (PoW), Proof of Stake (PoS), or other variations like Delegated Proof of Stake (DPoS) and Proof of Authority (PoA). These mechanisms ensure agreement across the network on the validity of transactions and prevent fraud.

Cryptocurrencies can serve various purposes. Some, like Bitcoin, function primarily as a store of value or digital gold. Others, like Ethereum, go beyond simple transactions and support smart contracts and decentralized applications (dApps). Stablecoins such as USDT or USDC aim to maintain a 1:1 peg with fiat currencies, making them more suitable for everyday transactions and price-stable use cases. Users interact with cryptocurrencies through wallets, which store private keys needed to access and manage funds. Transactions are typically fast, borderless, and less costly compared to traditional banking systems, especially for cross-border payments. Cryptocurrencies are increasingly adopted in areas such as E-commerce, remittances, gaming, finance, and decentralized finance (DeFi). However, due to their pseudonymous nature and evolving regulatory landscape, users are advised to conduct due diligence and comply with relevant legal and tax obligations.