What is cryptocurrency?

Cryptocurrency is a digital asset protected by one-way cryptography. It appears on a blockchain, a distributed ledger that is visible and shared among all users in a permanent and verifiable manner that is almost hard to forge or hack. The initial goal of cryptocurrencies was to enable internet payments to be performed directly between two parties without the need of a third-party middleman such as a bank. Additional applications and capabilities are fast growing, thanks to the advent of smart contracts, non-fungible tokens, stablecoins, and other breakthroughs.

The value of cryptocurrency is derived from a mix of scarcity and the impression that it is a store of wealth, an anonymous form of payment, or an inflation hedge. Investors in cryptocurrencies may purchase or sell them directly on a spot market, or indirectly via futures markets or financial products that include bitcoin exposure.

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