Decentralization:
Cryptocurrencies are typically decentralized, meaning they are not controlled by any single entity or government. Instead, they operate on a distributed ledger (blockchain) maintained by a network of computers (nodes).
Blockchain Technology:
A blockchain is a public ledger that records all cryptocurrency transactions. It consists of a chain of blocks, each containing a list of transactions. Once a block is added to the blockchain, the information it contains becomes permanent and tamper-proof.
Cryptography:
Cryptocurrencies use cryptographic techniques to secure transactions, control the creation of new units, and verify the transfer of assets. This ensures that transactions are secure and that the currency cannot be counterfeited.
Anonymity and Transparency:
While transactions are recorded on a public ledger, the identities of the parties involved are often encrypted or pseudonymous. This provides a degree of anonymity, though the transaction details (amounts, times, addresses) are transparent and publicly accessible.
Digital Nature:
Cryptocurrencies are entirely digital and exist only in electronic form. They are stored in digital wallets, which can be software-based (on a computer or smartphone) or hardware-based (on specialized devices).
