What Is Cryptocurrency?

Cryptocurrency is an investment vehicle which uses sophisticated coding to verify transactions and manage a public ledger known as blockchain. First released as an investment option in 2009, its origins remain unclear with Satoshi Nakamoto being widely believed to have created it. Now popular among investors who trade profitably and speculate over future prices.

Cryptocurrencies like bitcoin offer many advantages over international wire transfers in terms of speed and anonymity; international transfers usually take at least 24 hours while bitcoin transfers can happen within minutes for only a fraction of what banks charge in fees. Furthermore, cryptocurrency's blockchain makes it nearly impossible to trace or track back origins of transactions made with them.

Cryptocurrency does have its limitations as both a medium of exchange and store of value. For instance, cryptocurrency payments are generally not widely accepted among consumers and surveys suggest only a minority of crypto holders use their digital assets regularly in transactions. Furthermore, large price fluctuations make cryptocurrency hard to retain its purchasing power over time.

Unregulated cryptocurrency creates concerns of fraud, tax evasion, cybersecurity risks and financial stability risks. Furthermore, mining cryptos requires considerable computing power that consumes electricity with negative environmental ramifications; some governments have begun considering regulation. While consumers should remain cautious and take steps to safeguard their investments such as two-factor authentication for accounts on cryptocurrency exchanges and keeping assets separate from online services via digital wallets that don't link back directly.