What is Cryptocurrency ?

A cryptocurrency, also known as a crypto-currency or crypto, is a type of digital currency that operates as a means of exchange over a computer network and is not supported or maintained by any one central organization, such as a bank or government.

digital ledger is a computerized database that uses strong encryption to secure transaction records, regulate the production of new coins, and confirm the transfer of currency ownership, is where individual coin ownership records are kept. Despite their name, cryptocurrencies are not thought of as currencies in the traditional sense. Although they have received a variety of classifications, including those of commodities, securities, and currencies, in practice, cryptocurrencies are generally seen as a separate asset class. Some coin maintenance schemes employ validators. A proof-of-stake model requires owners to pledge their tokens as security. In exchange, individuals receive control over the token in proportion to their investment. These token stakers typically acquire more ownership over time through network fees, newly created tokens, or other similar compensation systems.

Cryptocurrency is often not issued by a central body and does not exist in tangible form like paper money. As contrast to a digital currency controlled by a central bank, cryptocurrencies often employ decentralized control (CBDC). A cryptocurrency is typically seen as centralized when it is minted, generated before issuance, or issued by a single issuer. Each cryptocurrency operates using distributed ledger technology, often a blockchain, which acts as a public database of financial transactions when used with decentralized control. Traditional asset classes with moderate exposure to cryptocurrency returns include stocks, commodities, and currencies, as well as macroeconomic variables.

Bitcoin was the first decentralized cryptocurrency, and it was first made available in 2009 as open-source software. More than 9,000 other cryptocurrencies were available on the market as of March 2022, more than 70 of which had a market valuation greater than $1 billion.

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