What is cryptocurrency? A brief overview
Essentially, cryptocurrency is a digital or virtual currency that is secured by cryptography, making it practically impossible to counterfeit or double spend. The key distinction of cryptocurrencies is their decentralized nature. Unlike traditional currencies, which are controlled by central banks, cryptocurrencies operate on blockchain technology – a distributed ledger maintained by a network of computers. This decentralization eliminates the need for intermediaries, such as banks, and provides transparency, security, and resistance to censorship.
Blockchain: An indispensable backbone
At the heart of every cryptocurrency is blockchain technology. Think of blockchain as a constantly growing chain of "blocks," each containing records of transactions. Once a block is added to the chain, it is practically impossible to alter, providing an immutable and verifiable record of all transactions. This innovative technology has applications far beyond cryptocurrencies, including supply chain management, healthcare, and voting, promising a future based on trust