Understanding Cryptocurrency: A Beginner’s Guide to the Future of Finance

Cryptocurrency, often shortened to "crypto," is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by governments (also known as fiat currencies), cryptocurrencies are decentralized and typically built on blockchain technology.

What is Blockchain?

At the heart of most cryptocurrencies is blockchain—a distributed ledger technology. Think of it as a public, unchangeable database that records all transactions across a network of computers. This ensures transparency and prevents tampering or double-spending.

Key Features of Cryptocurrency

1. Decentralization: Most cryptocurrencies operate on a decentralized network, meaning no single authority (like a bank or government) controls them.

2. Security: Transactions are encrypted and recorded on the blockchain, making them highly secure.

3. Transparency: All transactions are public available and verifiable.

4. Limited Supply: Many cryptocurrencies have a fixed supply, like Bitcoin, which has a cap of 21 million coins. This scarcity can influence value.