Cryptocurrency
BeginnerCryptocurrency is a type of digital currency that uses cryptography to secure transactions and typically operates on a decentralised network, usually a blockchain, without being issued or controlled by a central bank.
The first and best-known cryptocurrency, Bitcoin, was launched in 2009. Since then, thousands of others have been created, including Ether, which runs on the Ethereum network and supports applications built on the blockchain.
Cryptocurrencies are recorded on a shared digital ledger, maintained by a network of computers. Transactions are verified by the network rather than by a bank, and records are extremely difficult to alter once confirmed. People hold cryptocurrencies in digital wallets, controlled by private keys.
For example, someone can send Bitcoin directly to another person anywhere in the world without using a bank, with the transaction recorded on the Bitcoin blockchain.
Supporters see cryptocurrencies as a way to transfer value without intermediaries, protect against currency debasement or build new financial applications. Critics point to extreme price volatility, use in illegal activities, energy consumption by some networks, frequent scams and the collapse of several major crypto firms. Most cryptocurrencies are not legal tender, and regulation varies widely between countries. Investors can lose their entire investment, and losses are often not covered by deposit protection or compensation schemes.
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