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Blockchain

Imagine a giant ledger that records all transactions. Every time a transaction occurs, it is recorded in a block. That block is linked to previous ones, forming a chain, hence the name.

This ledger is public and distributed. That means thousands of computers around the world (called nodes) have a copy of it. This prevents someone from secretly modifying it.

Cryptography

The security of cryptocurrencies is based on advanced cryptography. This prevents someone from falsifying a transaction, stealing your digital identity, or creating coins from scratch.

Every person who uses cryptocurrencies has a public key (like an email address) and a private key (like your password). With the private key, you can sign your transactions and prove that you own your funds.