Cryptocurrency

Definition

Cryptocurrency is a digital or virtual form of currency that uses cryptography for security and operates independently of a central authority. It is typically based on decentralized networks using blockchain technology to ensure transparency and prevent fraud.

5 Must Know Facts For Your Next Test

1. Bitcoin was the first cryptocurrency, introduced in 2009 by an anonymous entity known as Satoshi Nakamoto.
2. Blockchain technology underpins cryptocurrencies, providing a secure and transparent ledger of all transactions.
3. Cryptocurrencies can be used for various financial transactions, including peer-to-peer payments and investments.
4. The value of cryptocurrencies can be highly volatile, influenced by market demand, regulatory news, and technological advancements.
5. Many companies are integrating cryptocurrencies into their accounting information systems to facilitate transactions and investment tracking.

Review Questions

Related terms

Blockchain:

A decentralized digital ledger that records all transactions across a network of computers.

Fiat Currency: Government-issued currency that is not backed by a physical commodity but rather by the government that issued it.

Decentralization: The distribution of functions and powers away from a central authority to multiple locations or participants.