A cryptocurrency is a digital asset that is protected by strong cryptography and can be exchanged to validate transactions just like fiat currencies.
Since these virtual currencies are protected by cryptography, they are known as cryptocurrencies. Every transaction occurring in a cryptocurrency and individual coin ownership is saved in a database. Usually, cryptocurrencies are based on a blockchain, and the cryptocurrency network a group of connected devices called ‘nodes.’
A cryptocurrency is usually a community-driven decentralized network for currency exchange. Remember how a central bank controls the currency and monetary policy in your country? A cryptocurrency doesn’t have that. There is no control of central authorities like governments and financial institutions. Instead, a cryptocurrency uses what we call a ‘blockchain’ in achieving its decentralized nature.
Cryptocurrency networks have a predefined protocol that guides all the activities on the network. This includes activities like the introduction of new currency units, the process of transactions, validations of transactions, and likewise activities.
Over the years, cryptocurrencies of distinct features have been released. Bitcoin is the first modern-day cryptocurrency, now popular globally. It started the cryptocurrency revolution and paved the way for newer cryptocurrencies that spoon flooded the market. Ethereum is another popular cryptocurrency apart from Bitcoin.