What is crypto currency?
- Cryptocurrency is a digitally generated and transferred currency that is not tied to a central authority.
- Cryptocurrencies are encrypted and securely stored and traded using mathematical methods called cryptography.
- The most important feature of cryptocurrencies is that they do not have a central control mechanism. In this way, cryptocurrencies gain or lose value according to supply and demand.
- Another feature of cryptocurrencies is that they are produced in limited numbers. For example, it is known that the most popular cryptocurrency, Bitcoin, will produce 21 million units in total.
The usage areas of cryptocurrencies are very diverse. Some cryptocurrencies are used as a means of payment, while others are designed for different purposes such as smart contracts, decentralized applications or digital assets.
- The advantages of cryptocurrencies include fast and cheap transactions, anonymity, transparency and security. Disadvantages include high volatility, lack of regulation, exposure to cyber attacks and requiring technical knowledge.