A cryptocurrency is a type of digital currency that uses cryptography to secure and verify transactions, as well as to control the creation of new units of the currency. Unlike traditional currencies issued by governments, cryptocurrencies are decentralized and operate on a distributed network of computers. Being decentralized means they are not controlled by any central entity like a central bank or government: transactions and currency control occur through a consensus system based on blockchain technology.
Blockchain is a public and secure ledger that records all transactions made with a cryptocurrency. Each transaction is verified and added to a block, which is then linked to other blocks in a continuous chain. This ensures transparency, immutability, and the integrity of transactions.
Mining, a computational process, provides security to the protocol and gives value to the cryptocurrency.
Furthermore, the value of a cryptocurrency can be driven by its utility. For example, Ethereum has gained popularity due to its ability to create and execute Smart Contracts, which enable secure and efficient transactions without intermediaries.
Learn how to buy and sell cryptocurrencies here.