Cryptocurrency is digital money in which there is no involvement of intermediates like the government or central banks.

It introduces decentralization in the financial ecosystem and this makes all cryptocurrencies immune to any kind of third-party manipulations.

It all began in 2009 with the rise of Bitcoin, the first cryptocurrency ever, and the concept of blockchain and cryptocurrencies came to life.

Cryptocurrencies work on three pillars: blockchain, cryptography and crypto mining.

Blockchain -

Blockchain is quite similar to the game of Jenga. Every block is a Jenga piece, once you tamper with a piece from the bottom, it makes it harder for the following blocks to sustain. So, each block is permanent, which makes it secure and incorruptible over time.

Cryptography -

It is the main concept behind the working of cryptocurrencies. It is a method of securing information so that only the person intended can understand it. Cryptocurrencies use two keys - the private key and the public key.

The public key is like your bank account number, which can be shared with others. The private key is like a card pin that shouldn’t be shared with anyone.

Crypto mining -

It helps in maintaining the blockchain by attaching more transactions in the blockchain and rewards miners for the same. This process encourages miners to maintain the blockchain by producing more and more cryptocurrencies and thus allowing new coins into circulation.

Unlike with banks, there are no restrictions as to who can use cryptocurrencies. Anyone can invest and trade in crypto. So it completely eliminates the need for control of a third party and everyone is a part of the community.

But there are some risks to it..
Like, in this system, anyone can create multiple accounts while being completely anonymous and there are no rules or guidelines which the users have to follow.. So, this creates potential risks of illegitimate activities such as money laundering or drug trafficking, etc.

Also, cryptocurrencies are completely based on code. So, there is a potential risk of hackers breaking into crypto-wallets.