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What is Cryptocurrency

What is Cryptocurrency?

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Cryptocurrency (or crypto) is a form of digital currency that allows people to transmit value in a digital environment. It is a portmanteau of the words ‘cryptography’ and ‘currency’ since it uses cryptography to secure transactions happening on the blockchain network.

You may ponder how it differs from your traditional mobile banking or UPI (Unified Payment Interface). Cryptocurrency is generally decentralised in nature, which means it is not governed by any central government, making them immune from government interference or manipulation. Though governments worldwide are keeping a close eye on it and are imposing regulations in this space, thereby implying that crypto is here to stay. Cryptoserves the same purpose as your traditional fiat currency (INR, USD, EUR, etc.) with added characteristics. 

Most cryptocurrencies are based on blockchain technology. Blockchain is a distributed ledger technology implemented by a network of computers called nodes that validate the network’s transactions. Cryptocurrencies, therefore, allow for the transfer of value across the globe round the clock without the need of any financial intermediaries.

Who invented Cryptocurrency?

The first cryptocurrency was Bitcoin which was released in a white paper in 2009 by a person using the pseudonym Satoshi Nakamoto. Till date, the true identity of that person remains unknown.

Bitcoin has spawned a large number of successive cryptocurrencies, some with the aim of competing and others seeking to incorporate features not available in Bitcoin. Nowadays, there are many blockchains that not only allow users to send and receive funds, but also run decentralised applications (dApps) using smart contracts. One of the most recognised cryptocurrencies on such a blockchain is Ethereum.

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