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Cryptocurrency is a type of digital currency based on blockchain technology, which ensures the security and transparency of transactions through cryptographic algorithms. Here is a basic introduction to cryptocurrency:
Technical Foundation: Cryptocurrency uses blockchain technology, a distributed ledger that records all transactions to ensure data integrity and immutability.
Decentralization: Cryptocurrency does not require the endorsement of central banks or governments. They are managed in a decentralized manner by verifying and recording transactions through nodes in the network.
Cryptographic Algorithms: Cryptocurrency uses cryptographic algorithms to protect the security of transactions, for example, Bitcoin uses the SHA-256 algorithm.
Types: Cryptocurrency comes in various types, including traditional ones like Bitcoin, Ethereum, and emerging ones like Meme Coins. Meme Coins often lack practicality or technical innovation but generate hype through social media.
Use Cases: Cryptocurrency can be used for transactions, investment, and value storage. However, their prices are highly volatile and cannot serve as stable accounting units or value storage mechanisms.
Issuance Mechanism: The issuance mechanism of cryptocurrency includes mining, which involves solving mathematical problems through computer calculations to obtain new cryptocurrency.
Legal Status: Cryptocurrency is legally considered as a commodity or virtual commodity, rather than real currency.