Important Topic: What is Cryptocurrency?

Important Topics for Competitive Exams

Important Topic

Cryptocurrency is a peer-to-peer, decentralized and digital currency system that furnish online users with the capability of processing transactions using digital exchange units known as virtual currency. This system was created by the Japanese computer programmer known by the pseudonym of Satoshi Nakamoto in 2009.

Benefits of Cryptocurrency:

1. Privacy Protection.
2. Cost-effectiveness
3. Lower Entry Barriers
4. Alternative to Banking Systems and Fiat Currencies
5. Open Source Methodology and Public Participation
6. Immunity to Government led Financial Retribution

Risks Involved:

1. Distributed Denial of Service (DDoS) attacks on Cryptocurrency System
2. Uncertain Regulatory Environment
3. Lack of Liquidity and Lower Acceptability
4. Price Volatility
5. Uncertainty over Consumer Protection and Dispute Settlement Mechanisms

Wikipedia: A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.

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