Definition: A digital or virtual form of currency that uses cryptography for security and is typically based on technology termed as blockchain. Cryptocurrencies are decentralized and operate independently of central banks.
Key Features:
Decentralization: Not tied to traditional financial institutions.
Cryptographic Security: Transactions and wallet addresses are secured by advanced cryptographic techniques.
Immutability: Once confirmed, transactions cannot be reversed.
Common Applications:
Digital Payments: Buying and selling goods and services.
Investments: As an asset class similar to stocks or commodities.
Smart Contracts: Self-executing contracts with the terms of the agreement between buyer and seller directly written into lines of code.