## Introduction to Cryptocurrencies Cryptocurrencies are digital or virtual currencies that use cryptography for security. They are decentralized and typically built on blockchain technology, which is a distributed ledger enforced by a network of computers, making it resistant to fraud and counterfeiting. Since the inception of Bitcoin in 2009, the world of cryptocurrencies has expanded significantly, giving rise to thousands of altcoins and a flourishing ecosystem of decentralized finance (DeFi) applications. ### What Are Cryptocurrencies? Cryptocurrencies serve as a medium of exchange, much like traditional currencies but without a central authority. This means transactions can occur directly between users without the need for intermediaries like banks. Each cryptocurrency operates on its own underlying technology and protocol, with varying degrees of complexity and functionality. ### Key Characteristics of Cryptocurrencies 1. **Decentralization**: Most cryptocurrencies operate on a decentralized network, which means no single entity has control over the entire network. This minimizes the risk of manipulation or fraud. 2. **Security and Anonymity**: Cryptographic techniques ensure that transactions are secure and can protect the identities of users, depending on the design of the specific cryptocurrency. 3. **Limited Supply**: Many cryptocurrencies have a capped supply, such as Bitcoin, which has a maximum of 21 million coins that can ever be mined. This scarcity can drive demand and value. 4. **Global and Borderless**: Cryptocurrencies can be sent and received anywhere in the world, making them accessible to anyone with an internet connection. This feature facilitates easier cross-border transactions and can serve as a tool for financial inclusion in underbanked regions. ### How Do Cryptocurrencies Work? Cryptocurrencies operate on blockchain technology, which records all transactions across a network. Each transaction is bundled into a block and added to the chain of existing blocks, hence ## Introduction to Cryptocurrencies Cryptocurrencies are digital or virtual currencies that use cryptography for security. They are decentralized and typically built on blockchain technology, which is a distributed ledger enforced by a network of computers, making it resistant to fraud and counterfeiting. Since the inception of Bitcoin in 2009, the world of cryptocurrencies has expanded significantly, giving rise to thousands of altcoins and a flourishing ecosystem of decentralized finance (DeFi) applications. ### What Are Cryptocurrencies? Cryptocurrencies serve as a medium of exchange, much like traditional currencies but without a central authority. This means transactions can occur directly between users without the need for intermediaries like banks. Each cryptocurrency operates on its own underlying technology and protocol, with varying degrees of complexity and functionality. ### Key Characteristics of Cryptocurrencies 1. **Decentralization**: Most cryptocurrencies operate on a decentralized network, which means no single entity has control over the entire network. This minimizes the risk of manipulation or fraud. 2. **Security and Anonymity**: Cryptographic techniques ensure that transactions are secure and can protect the identities of users, depending on the design of the specific cryptocurrency. 3. **Limited Supply**: Many cryptocurrencies have a capped supply, such as Bitcoin, which has a maximum of 21 million coins that can ever be mined. This scarcity can drive demand and value. 4. **Global and Borderless**: Cryptocurrencies can be sent and received anywhere in the world, making them accessible to anyone with an internet connection. This feature facilitates easier cross-border transactions and can serve as a tool for financial inclusion in underbanked regions. ### How Do Cryptocurrencies Work? Cryptocurrencies operate on blockchain technology, which records all transactions across a network. Each transaction is bundled into a block and added to the chain of existing blocks, hence