What is Cryptocurrency?

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on block chain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. A cryptocurrency is a new form of digital asset based on a network that is distributed across a large number of computers. The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network. Blockchains, which are organizational methods for ensuring the integrity of transactional data, is an essential component of many cryptocurrencies. Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them and been praised for their portability, divisibility, inflation resistance, and transparency.

Author:
Dharmendra Khairajani, Assistant Professor, Unitedworld School of Business (UWSB)

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