Cryptocurrencies

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Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate on blockchain technology—a decentralized network of computers. Unlike traditional currencies (like USD or EUR), cryptocurrencies are not issued or controlled by governments or central banks.

🔐 Key Features of Cryptocurrencies

Feature Description

Decentralized No single authority controls it (peer-to-peer networks)

Blockchain-Based Transactions are recorded on public ledgers (blockchains)

Limited Supply Many have a capped total supply (e.g., 21 million BTC)

Pseudonymous Users are identified by wallet addresses, not real names

Global & Borderless Can be sent/received across countries without intermediaries

💰 Examples of Major Cryptocurrencies

Name Symbol Use Case

Bitcoin BTC Store of value, digital gold

Ethereum ETH Smart contracts, dApps

Tether USDT Stablecoin (pegged to USD)

Solana SOL High-speed decentralized apps

Ripple XRP Cross-border banking transactions

🔄 How It Works

You create a wallet

A digital address to send/receive crypto

You buy crypto

Through an exchange like Coinbase, Binance, Kraken

You send/store crypto

Transfers occur via blockchain confirmations

You spend or trade

Purchase goods, stake it, or trade for other tokens

📈 Why People Use or Invest in Crypto

Benefit Reason

Speculation Price volatility creates profit potential

Decentralization No government or bank interference

Store of Value Some use it as a hedge against inflation or fiat instability

Financial Inclusion Allows unbanked people to access money systems

Smart Contracts Programmable money (DeFi, NFTs, dApps)

⚠️ Risks & Criticisms

Risk/Concern Explanation

Volatility Prices can rise or crash sharply

Regulatory Uncertainty Governments are still deciding how to regulate it

Scams & Hacks Phishing, rug pulls, and exchange hacks are common

Environmental Impact Proof-of-Work mining (like Bitcoin) uses large energy

No Recovery Lost private keys = lost funds permanently

🧠 Crypto vs. Traditional Currency

Aspect Cryptocurrency Fiat Currency

Issuer Open-source protocol or network Government (central bank)

Supply Often capped (e.g. BTC: 21M) Unlimited (inflationary)

Control Decentralized Centralized

Physical Form Digital only Physical bills & digital

Transaction Speed Minutes or seconds Seconds to days

🧾 Summary

Cryptocurrencies represent a radical shift in how value is created, stored, and transferred. Powered by blockchain, they offer a decentralized alternative to traditional finance, enabling fast, transparent, and borderless transactions—but with high volatility and regulatory challenges.