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What are Cryptocurrencies?

A cryptocurrency is a form of virtual money. Like its fiat counterparts, it can function as a medium of exchange, a store of value, and a unit of account. However, unlike traditional currencies, cryptos are designed to be decentralized. In other words, they are not managed or influenced by any form of central government or bank. Instead, all cryptos leverage blockchain technology to remain independent. These are self-driven systems that function through certain participants contributing computing power to complete cryptographic tasks that help with security, maintenance, and the creation of new coins or tokens.

Generally, cryptocurrencies are also designed to be deflationary. Bitcoin, for example, is scheduled to release its last coin in 2140. Because its supply is limited and assuming demand for it remains constant or increases, Bitcoin’s value should continue to rise.

Cryptocurrencies also allow its users to remain anonymous and experience incredibly low transaction fees when compared to traditional financial institutions. Due to these and other basic factors, cryptocurrency adoption is increasing at an impressive rate around the world.

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