What is a Cryptocurrency

A cryptocurrency is a digital form of money that is protected by complex codes. It is typically used for exchange purposes and can function globally at all times without the involvement of intermediaries like banks and payment processors.

The decentralized nature of cryptocurrencies enables individuals to conduct peer-to-peer transactions without the need for physical wallets or bank accounts. Instead, they use specialized digital wallets or cryptocurrency exchanges.

Bitcoin is the most well-known and oldest cryptocurrency, first created in 2009 by an unknown individual or group named Satoshi Nakamoto. Since then, thousands of other cryptocurrencies have emerged, each with distinct characteristics and purposes. Similar to traditional forms of currency, cryptocurrencies can be used as a medium of exchange.

However, their uses have expanded to various industries, including decentralized finance, artificial intelligence, gaming, governance, healthcare, and digital collectibles. Most cryptocurrencies are decentralized, meaning they rely on a network of computers (nodes) to manage and record transactions on a public ledger called the blockchain.

Whenever a cryptocurrency transaction occurs, it must be verified and approved by the network nodes. Each node maintains a local copy of the blockchain and updates it whenever new data is added. Once a transaction is validated and confirmed, it becomes a permanent part of the blockchain.

The decentralized structure of the blockchain network makes it more secure because there is no single point of vulnerability for malicious actors to exploit. If a node behaves improperly, they can quickly be removed from the network.