In section 1, we learnt that cryptocurrencies are digital assets used for processing payments or transferring value online. Unlike traditional money, cryptocurrencies exist solely in the digital realm, allowing users to send money without relying on banks or cash. Introduced in 2009 with Bitcoin, cryptocurrencies use cryptography for secure transactions and are stored in digital wallets.
A key technology behind cryptocurrencies is blockchain, a digital ledger that records all transactions, ensuring security and transparency. This decentralised nature eliminates the need for a central authority like a bank or government, making transactions faster and cheaper.
Cryptocurrencies offer financial services to the unbanked and underbanked, providing a more inclusive financial system. They also introduce smart contracts, self-executing contracts with terms written into code, which save time and money by removing intermediaries.
As cryptocurrencies continue to evolve with advancements in technology and regulatory measures, they have the potential to reshape the future of finance by offering a secure, decentralised alternative to traditional banking systems.
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