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What Is Cryptocurrency? Simplified In 200 Words


November 19, 2019


June 29th, 2023

Cryptocurrencies are digital money work as a medium of exchange just like normal currency.

Bitcoin is the first cryptocurrency.

As its name suggests, it’s created, maintained, and stored using cryptography. A cryptocurrency is secure and does not involve any central authority to perform a transaction.

American cryptographer David Chaum developed anonymous cryptographic money and after that, considerable efforts made in that direction.

The technical architecture of cryptocurrencies was created by Satoshi Nakamoto, a pseudonymous person or group of persons.


  • Decentralized nature
  • Eliminate central authority like governments and banks
  • Transactions can be performed directly via public/private keys
  • Can’t be removed or altered
  • All transactions are cryptographically secured (hash functions)

It has been making headlines worldwide since its launch and people are still skeptical about its use in day-to-day transactions.


Some challenges in adoption:

  • Use for illegal activities
  • Vulnerabilities of the underlying platform
  • Exchange rate instability
  • Lack of knowledge
  • High infrastructure and transaction cost

There are a number of cryptocurrencies in the market in either evolving or dying phase.

All transactions are represented by ledger entries into the system and are managed by a community of miners.


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