Cryptocurrency is a digital or virtual currency that uses cryptography to ensure the security of transactions. It is based on blockchain technology, which is a distributed database where each transaction is recorded as a block and linked to previous blocks. This ensures transparency and immutability of data.
One of the key features of cryptocurrencies is their decentralization. Unlike traditional currencies, which are controlled by central banks, cryptocurrencies do not have a single control center. Instead, they operate on the basis of consensus between network participants. This means that no one person or organization can control the entire system.
However, despite all the benefits, cryptocurrencies also have their risks and limitations. Firstly, they can be subject to volatility, which means that their value can change dramatically in short periods of time. Secondly, due to the lack of regulation by government agencies, investors may face problems in protecting their rights in the event of fraud or other violations. Therefore, before investing in cryptocurrencies, it is important to carefully study the market and the risks associated with this type of asset.
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