A cryptocurrency (crypto coin) is a type of digital or virtual currency that uses cryptography for security. Cryptocurrencies operate on decentralized systems based on blockchain technology—a distributed ledger enforced by a network of computers.
Key Features:
1. Decentralized: Cryptocurrencies operate without a central authority like a bank or government.
2. Secure: Cryptography ensures secure and transparent transactions.
3. Anonymity: Transactions are pseudonymous, meaning they don’t directly reveal identities.
4. Borderless: Transactions can be conducted globally without intermediaries.
5. Limited Supply: Many cryptocurrencies, like Bitcoin, have a capped supply, contributing to their value.
Popular Cryptocurrencies:
1. Bitcoin (BTC): The first and most well-known cryptocurrency.
2. Ethereum (ETH): Known for its smart contract functionality.
3. Binance Coin (BNB): Native to the Binance Exchange.
4. Cardano (ADA): Focuses on sustainability and scalability.
5. Ripple (XRP): Designed for fast and low-cost international payments.
Uses:
Investment: Many use crypto as a speculative investment.
Payments: Some merchants accept crypto for goods and services.
Decentralized Finance (DeFi): Provides financial services like lending and borrowing without traditional banks.
NFTs: Used in purchasing non-fungible tokens.
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