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What is cryptocurrency?
Cryptocurrency is a form of digital currency that operates on decentralized networks secured by cryptography without any control by central authorities. Bitcoin, introduced in 2009 by the unknown individual or group Satoshi Nakamoto, was the first cryptocurrency and functions through a public, distributed ledger known as the blockchain, which records transactions transparently and immutably across a global network of participants.
Bitcoin transactions are verified through a collective process in which network participants validate and add transactions to the blockchain, ensuring security without centralized control. A key feature of Bitcoin is its fixed monetary supply, as the protocol limits the total number of bitcoins to 21 million, with new units issued at a decreasing rate. This enforced scarcity distinguishes Bitcoin from traditional currencies, as it is deflationary by design.
What problems created by the financial crisis does it aim to solve?
- It made financial transactions more transparent
- It is not reliant on any big institution or corporation
- There is no single point of failure
Benefits of cryptocurrency
- Users don’t have to rely on banks and can keep privacy
- Transactions can be done from anywhere in the world any time
- There are no restrictions on the amount of money that can be sent
- People didn’t have to rely a single bank anymore to keep their money safe
- Money was protected from inflation as there is a fixed amount of coins that will ever exist
- Bigger amounts of money could be moved faster, cheaper and more privately
- Peoples accounts/crypto-wallets cannot be frozen unlike bank accounts
Downsides of cryptocurrency.
Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Unlike traditional currencies, it is decentralized, meaning no single authority controls it. The first and most well-known cryptocurrency is Bitcoin, introduced in 2009 by an anonymous person or group known as Satoshi Nakamoto.