For the past few years, there has been a lot of talk about cryptocurrency. The term refers to a virtual currency that is exchanged only through a blockchain. The concept was developed on the principle of cryptography and offers an alternative economic model that is steadily gaining in importance.
How do we define cryptocurrency?
A cryptocurrency is an electronic form of money. It is based on a decentralized computer network, operating on a peer-to-peer basis. Its use, its transactions as well as its modes of emission are exclusively done by means of cryptographic algorithms. It is therefore a virtual or electronic currency, which exists only in this form.
Cryptocurrency does not have a physical form. Unlike traditional money, it cannot be materialized or printed. The units available on the market are determined in advance.
A fully decentralized financial system
Cryptocurrency is built and operates on a fully decentralized system. This feature makes it incompatible with coins, banknotes, or bank cards as we use them every day. Their value does not depend on the price of gold, let alone currencies.
Although cryptocurrencies are not regulated by financial institutions or governments, they are slowly beginning to recognize their importance. Apart from Bitcoin, which is the best-known cryptocurrency, there are now nearly 3,600 virtual currencies in circulation. Not all of them have the scale of the reference crypto but meet unique transaction needs.