Cryptocurrency

Cryptocurrencies are digital or virtual currencies that use cryptography for security, operating on decentralized networks based on blockchain technology. Unlike traditional currencies issued by central banks, cryptocurrencies are typically not subject to governmental monetary policies and often aim to provide alternatives to conventional financial systems.

At their core, cryptocurrencies rely on distributed ledger technology, most commonly blockchain, to record all transactions across a network of computers. This system ensures transparency, security, and immutability of transaction records without the need for a central authority. Key features include decentralization, pseudonymity, and the use of consensus mechanisms like Proof of Work or Proof of Stake to validate transactions and create new units of the currency.

Bitcoin, created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto, was the first and remains the most well-known cryptocurrency. Since then, thousands of alternative cryptocurrencies (often called "altcoins") have been created, with Ethereum, Litecoin, Solana among the more prominent ones. Beyond serving as digital money, many cryptocurrencies support additional features like smart contracts and decentralized applications (DApps). While cryptocurrencies have gained significant attention and adoption, they also face challenges including price volatility, regulatory scrutiny, and concerns about their environmental impact, particularly for those using energy-intensive mining processes.