Cryptocurrency

Cryptocurrency is a virtual or digital currency that uses blockchain technology to record transactions and store transaction data in containers called “blocks.” These blocks are “chained” together and made available for inspection via a public ledger. Cryptocurrency uses cryptography for security and is decentralized. In other words, it is not issued or controlled by a central authority like a government or central bank.

Popular cryptocurrencies include Bitcoin, which was launched in 2009, and Ethereum, which was released in 2015. Cryptocurrencies are accessible globally and are stored in private digital wallets. Cryptocurrency units are called tokens or coins, and can be mined by computers that work to validate transactions on an existing blockchain. Coins that are mined can be held as investments, used to make purchases, or transferred to others.

Businesses are slowly embracing cryptocurrency because they are transparent, feature lower transaction costs than those offered by traditional financial intermediaries, and can be used internationally. On the downside, the cryptocurrency landscape is rife with scams, fraud, and boom-and-bust cycles. These risks make it difficult to rely on any single cryptocurrency as a stable store of value or medium of exchange.