. What is cryptocurrency?

Cryptocurrency (or “crypto”) is a digital currency, such as Bitcoin, is the most widely used
cryptocurrency that is an alternative payment method or speculative investment.
Cryptocurrencies get their name from the cryptographic techniques that let people spend them
securely without the need for a central government or bank.
Here are a few examples:
 Bitcoin was created as a decentralized payment system that operates independently of any
central authority or financial institution. Unlike traditional payment methods that rely on
banks to verify transactions, Bitcoin uses a secure system that doesn't require central
control.
 Ethereum is similar to Bitcoin in that it uses blockchain technology. However, instead of
being solely used for peer-to-peer payments, Ethereum is used to pay for transactions on
the Ethereum network. This network allows for the creation of entire financial
ecosystems without the need for a central authority. For example, insurance can be
managed without an insurance company, and real estate transactions can be tracked
without the need for a title company.
 There are many altcoins, which are cryptocurrencies other than Bitcoin, that have been
developed to take advantage of blockchain technology's various and, at times, promising
use cases.
Why do people invest in cryptocurrencies?
People invest in cryptocurrencies hoping their value will rise, netting them a profit. If demand
for a cryptocurrency like Bitcoin grows, its value could increase. Ethereum's cryptocurrency,
Ether, is used for transactions on its blockchain, driving its demand. Some see cryptocurrencies
as a better monetary system and not just investments.
Why is Bitcoin still popular?
Bitcoin remains popular despite price volatility. Recent price increases are partly due to SEC
approval of Bitcoin ETFs, halving of mining rewards, and increased interest rates. Bitcoin's
value is also seen in its role as a new monetary system.
How does cryptocurrency work?
Cryptocurrencies use blockchain, a tamper-resistant transaction record, to prevent double-
spending. They can be coins for transactions, tokens for value storage, or used in specific
software programs.
Pros and cons of cryptocurrency
 Cryptocurrency pros include its decentralized nature, which removes central banks from
managing money supply and can be seen as more secure. It also offers financial
opportunities to underserved communities and allows owners to earn passive income
through staking.
 Cryptocurrency cons include untested projects and low adoption rates, which may hinder
long-term returns. Price volatility poses risks for short-term investors, and environmental
concerns arise from energy-intensive mining. Regulatory uncertainty also affects the
market unpredictably.