26/03/2023
Cryptocurrency is the unit of record of a decentralized payment system. This payment system is a record of transactions stored on computers around the world. The data is packaged into blocks protected by cryptographic keys and combined into a chain, the blockchain.
Cryptocurrency has a number of hallmarks:
Lack of physical form. Cryptocurrency is essentially a code, not a bill, coin or card.
Decentralization. It cannot be controlled by states or corporations.
Anonymity. Data on transactions is available to all users of the network, but no one knows the identity of the owners of cryptocurrency wallets.
Irreversibility of transactions. Changing information in one of the blocks changes the whole chain, so it is impossible to undo a transaction.
Volatility. Most cryptocurrencies are not tied to traditional (fiat) currencies or gold. Their price is influenced by supply and demand, so the rate can change tens or thousands of times in a very short period of time.
Cryptocurrency is used as a means of payment, an investment tool, as well as for the maintenance of blockchain projects, computer games, meta-villages, mobile applications and so on.
In many countries, the legal status of cryptocurrency is not fully defined. In simple words, in Russia, you need to remember that cryptocurrency is not a means of payment. You can own it, buy or sell it, but not exchange it for goods and services.
Cryptocurrency can be obtained through mining, exchanged for goods and services or fiat money. You can buy cryptocurrency for fiat on exchanges, peer-to-peer exchanges, and exchanges.