Cryptocurrency is a digital or virtual form of currency that uses cryptography for security. Unlike traditional currencies issued by governments (fiat money), cryptocurrencies operate on technology called blockchain, which is a distributed ledger enforced by a network of computers (often referred to as nodes).

Key Features of Cryptocurrency:

1. Decentralization: Most cryptocurrencies operate on decentralized networks based on blockchain technology. This means they are not controlled by any central authority, such as a government or financial institution.
2. Blockchain Technology: A blockchain is a chain of blocks, where each block contains a list of transactions. This technology ensures transparency and prevents data tampering, as altering any part of the blockchain would require the consensus of the majority of the network.
3. Cryptography: Cryptocurrencies use cryptographic techniques to secure transactions, control the creation of new units, and verify the transfer of assets. This makes them secure and resistant to fraud.
4. Anonymity and Transparency: While transactions are recorded on a public ledger, the identities of the individuals involved in transactions can remain anonymous. However, all transaction details are transparent and permanently recorded on the blockchain.
5. Limited Supply: Most cryptocurrencies have a cap on the total supply, making them deflationary in nature. For example, Bitcoin has a maximum supply of 21 million coins.
6. Mining: Many cryptocurrencies, like Bitcoin, are created through a process called mining, where powerful computers solve complex mathematical problems to validate transactions and add them to the blockchain. Miners are rewarded with new coins for their efforts.
7. Smart Contracts: Some cryptocurrencies, like Ethereum, support smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. They automatically execute actions when predefined conditions are met.
8. Wallets: To store and manage cryptocurrencies, users need digital wallets. These can be hardware-based or software-based and are used to store the private and public keys required for transactions.
9. Exchange Platforms: Cryptocurrencies can be bought, sold, or traded on various online platforms known as cryptocurrency exchanges. These platforms facilitate the conversion of fiat currency to cryptocurrency and vice versa.
10. Volatility: Cryptocurrencies are known for their high price volatility, with values often experiencing significant fluctuations over short periods. This can present both opportunities and risks for investors.

Cryptocurrencies have gained popularity for their potential to provide financial inclusion, reduce transaction costs, and offer a hedge against inflation. However, they also face challenges such as regulatory scrutiny, security risks, and scalability issues. As the technology evolves, cryptocurrencies continue to gain acceptance and integration into the global financial system.