Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by governments (fiat money), cryptocurrencies operate on decentralized networks based on blockchain technology, which is a distributed ledger enforced by a network of computers (nodes).

The most well-known cryptocurrency is Bitcoin, created in 2009 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto. Since then, thousands of alternative cryptocurrencies have been developed, including Ethereum, Ripple (XRP), Litecoin, and many others.

Each cryptocurrency operates on its underlying technology and serves different purposes, from facilitating digital payments to enabling smart contracts and decentralized applications.

Cryptocurrencies offer several advantages, such as lower transaction fees, increased privacy, and the potential for high returns on investment.

However, they also come with risks, including high volatility, regulatory uncertainty, and the potential for fraud and cyber attacks³. Despite these challenges, cryptocurrencies continue to gain popularity and are increasingly being integrated into mainstream financial systems.

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