• A cryptocurrency is a digital currency or asset based on a distributed network across a large number of computers. It is spread across a decentralized network based on blockchain technology.
• Cryptocurrency uses an online ledger with strong cryptography to secure online transactions. Cryptocurrency does not exist in physical form like paper money and is typically not issued by a central authority.
• At present, nearly 15,000 different cryptocurrencies are traded publicly. The first blockchain-based cryptocurrency was Bitcoin. Bitcoin was launched in 2009 by an individual or group known by the pseudonym "Satoshi Nakamoto."
• Cryptocurrencies use a decentralised ledger for the security of transactions known as a blockchain. Using blockchain technology, participants can confirm transactions without a need for a central clearing authority. Since they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. In blockchain technology, ledgers are stored in a block. Once the block is full, it is encrypted and linked to the previous block.
• There are some other words that are frequently used with cryptocurrency like token, mining etc. Tokens are used with decentralised applications and are usually built on top of an existing blockchain. These ‘tokens’ can be held for value, traded, and ‘staked’ to earn interest. Mining is how new units of cryptocurrency are released into the world, generally in exchange for validating transactions.
• El Salvador is the first country to use bitcoin as legal tender, alongside the US dollar.
• The risks of trading cryptocurrencies are mainly related to its volatility. Also in most of the countries, cryptocurrencies are currently unregulated by governments.