Cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. Cryptocurrencies are decentralized and not subject to government or financial institution control.
- And the decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
- The most famous cryptocurrency is Bitcoin, which was created in 2009.
- Cryptocurrencies are designed through mining, which uses computing power to solve complex math problems that verify transactions on the blockchain, the public ledger of all cryptocurrency transactions. And miners are rewarded with cryptocurrency for their efforts.
Cryptocurrency trading is speculative and complex, and it involves significant risks. Prices can fluctuate on any given day. Given the price volatility, cryptocurrency is only suitable for some investors. Therefore, cryptocurrency should be considered a high-risk investment. Before investing, understand the risks involved and consult a financial advisor.