What is a cryptocurrency?
- A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
- A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
- A blockchain is a decentralized, distributed, and oftentimes public, digital ledger consisting of records called blocks that is used to record transactions across many computers so that any involved block cannot be altered retroactively, without the alteration of all subsequent blocks.
- This allows the participants to verify and audit transactions independently and relatively inexpensively.
Why in News?
- Visa Inc said that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
- The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar.
- Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference.
- Stablecoins may be pegged to a currency like the U.S. dollar or to a commodity’s price such as gold.