Question

What is cryptocurrency?

Answer 1

Cryptocurrency, such as Bitcoin or Namecoin, is a type of digital currency used for making online purchases. Like traditional money such as rupees or dollars, it serves as a medium of payment, but it exists only in digital form and is created and maintained electronically through blockchains, which are digital records of transactions. Unlike conventional currencies, cryptocurrencies are not regulated or backed by any central bank or government. Instead, they operate through a decentralised network of computers.

Funds are kept in a digital wallet stored on a computer or mobile device and can be transferred to others electronically. Every transaction made using cryptocurrency is logged in a blockchain, which is visible to all users. It relies on cryptographic techniques to authenticate transactions, secure fund transfers, and manage the supply of currency. As a 21st-century innovation, cryptocurrency is often referred to as the money of the future and has gained popularity around the world.