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Cryptocurrency, often called crypto, is a type of digital currency used for making payments.
People can use cryptocurrency to buy things. (Photo Credit: X)
Cryptocurrency has taken the world by storm, rapidly gaining popularity among investors, tech enthusiasts, and even everyday users. From social media buzz to billion-dollar trades, digital currencies are no longer just a futuristic concept—they are a global financial phenomenon.
People are drawn to cryptocurrencies because they offer a new way to store, spend, and grow money without depending on banks. As the world becomes more digital, the craze around crypto continues to grow, influencing finance, business, and even pop culture.
What is Cryptocurrency?
Cryptocurrency is a type of digital or virtual money that uses encryption (called cryptography) to secure transactions. Unlike traditional currency, it doesn’t exist in physical form and isn’t controlled by any central authority like a bank or government. Instead, it’s stored on decentralised networks called blockchains. People can use cryptocurrency to buy things, invest, or transfer money across borders quickly and securely, often with lower fees and more privacy than regular banking.
Types of Cryptocurrency:
There are thousands of cryptocurrencies today, but a few have become especially well-known:
Bitcoin (BTC): The first and most popular cryptocurrency, created in 2009. Often called “digital gold,” it’s mainly used for investment and large transactions.
Ethereum (ETH): Known for enabling smart contracts and decentralized apps (dApps). It’s the second-largest crypto after Bitcoin.
Ripple (XRP): Focuses on fast international money transfers for banks and financial institutions.
Litecoin (LTC): Created as a faster, lighter version of Bitcoin.
Tether (USDT): A stablecoin that is backed by real-world currency, such as the US dollar, to reduce price swings.
Dogecoin (DOGE): Started as a joke, but gained popularity thanks to internet memes and celebrity endorsements.
These currencies serve different purposes—from being digital cash to powering blockchain projects.
How Does Cryptocurrency Work?
Cryptocurrencies work using a technology called blockchain, a digital ledger that records all transactions made with a specific coin. Every time someone sends or receives cryptocurrency, the transaction is grouped with others into a “block.” This block is then added to a chain of previous transactions, forming a complete, transparent history that anyone can view.
Most cryptocurrencies use a system called decentralisation, meaning there’s no single authority like a bank. Instead, a network of computers (called nodes) verifies each transaction. For example, in Bitcoin, a process called mining is used, where computers solve complex math problems to validate transactions and earn new coins as rewards.
Instead of using your name, you interact through digital wallets with unique keys—a public key (like an address) to receive funds and a private key to approve transactions. This ensures security and privacy.
Cryptocurrency transactions are often faster and cheaper than traditional banking, especially for cross-border transfers. However, crypto is also highly volatile and can be risky. Still, with growing adoption, it’s transforming how people view and use money worldwide.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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