Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of central banks.
It uses decentralised technology, known as blockchain, to enable secure transactions and control the creation of new units.
Bitcoin is the first and most well-known cryptocurrency, but there are now thousands of others, including Ethereum, Litecoin, and Ripple.
Cryptocurrencies can be bought and sold on various exchanges, and their value is determined by supply and demand.
Transactions are verified by network nodes through cryptography and recorded on a public distributed ledger called a blockchain.
This provides transparency and security, as well as the ability to track transactions and prevent double-spending.
Cryptocurrency is often seen as a potential alternative to traditional banking systems, offering faster and cheaper transactions, greater privacy, and greater control over one's assets.
However, it is also subject to high volatility and risks, including hacking, fraud, and market fluctuations.
Cryptocurrencies operate outside of traditional financial systems and are not backed by physical assets or government guarantees.
Instead, they rely on complex mathematical algorithms and consensus mechanisms to validate transactions and maintain their integrity.
Mining is the process by which new cryptocurrency units are created, and it involves solving complex mathematical problems using specialised computer hardware.
The reward for mining varies by cryptocurrency and decreases over time as more units are created.
While cryptocurrencies have the potential to revolutionise the way we think about money and finance, they are also associated with a range of legal and regulatory issues.
Governments around the world are grappling with how to regulate cryptocurrencies, which are often used for illicit activities such as money laundering and tax evasion.
Despite these challenges, the popularity and use of cryptocurrencies continue to grow, with an increasing number of businesses accepting them as payment and investment opportunities attracting a growing number of investors.