Cryptocurrency, often simply called "crypto," is a digital or virtual currency that uses cryptography for security. Unlike traditional currencies (like USD or INR) issued by central banks, cryptocurrencies operate on decentralized networks, typically built on a technology called blockchain.

Key aspects:

* Digital Tokens: Cryptocurrencies are digital tokens that allow direct peer-to-peer payments through an online system.

* Decentralized: They are not reliant on any central authority, such as a government or bank, to uphold or maintain them. This means no single entity controls the currency's flow or value.

* Encryption: The use of encryption technologies means they function as both a currency and a virtual accounting system, making them incredibly difficult to counterfeit or double-spend.

How it works

* Blockchain: The core technology behind most cryptocurrencies is the blockchain. This is a public, distributed ledger that records all transactions across a network of computers. Once a transaction is recorded, it's very difficult to change or cheat the system.

* Transactions: When you send cryptocurrency, instructions are broadcast to the network. "Miners" (or validators) group these transactions into "blocks" and compete to solve complex cryptographic puzzles to add the new block to the blockchain. Once solved, the block is added, and the transaction is confirmed.

* Digital Wallets: To use cryptocurrencies, you need a digital wallet. These wallets store your encryption keys, which confirm your identity and link to your cryptocurrency holdings.