Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that use cryptography for security. The main types include:

Bitcoin (BTC) – The first and most well-known cryptocurrency, often considered digital gold.
Altcoins – Any cryptocurrency other than Bitcoin. Examples include:
- Ethereum (ETH) – Known for smart contracts and decentralized applications.
- Ripple (XRP) – Focuses on fast, low-cost cross-border transactions.
- Litecoin (LTC) – A faster and lighter version of Bitcoin.
- Cardano (ADA) – Based on peer-reviewed academic research.
- Polkadot (DOT), Solana (SOL), and others – Each with unique functionalities.
Stablecoins – Pegged to stable assets like USD (e.g., USDT, USDC) to reduce volatility.
Memecoins – Created for fun or community engagement, like Dogecoin (DOGE) and Shiba Inu (SHIB).
Privacy Coins – Designed to provide anonymous transactions, like Monero (XMR) and Zcash (ZEC).
Utility Tokens – Provide access to a product or service on a specific platform.
Governance Tokens – Allow holders to vote on project decisions (e.g., UNI for Uniswap).

Decentralization – No central authority controls it, reducing dependency on banks or governments.
Global Transactions – Fast and inexpensive cross-border transfers.
Financial Inclusion – Gives access to people without access to traditional banking.
Privacy and Security – Blockchain ensures transparency while keeping identity hidden.
Smart Contracts – Automated and trustless transactions without intermediaries.

High Returns – Many early investors made substantial profits.
Decentralized Finance (DeFi) – Offers lending, borrowing, and saving without traditional banks.
Hype and Speculation – Influenced by media, celebrities, and influencers.
Tech Appeal – Attracts tech-savvy users interested in blockchain and innovation.
Limited Supply – Many cryptos like Bitcoin have a cap, creating a sense of scarcity.

Volatility – Prices can fluctuate wildly.
Lack of Regulation – May lead to scams or illegal use (money laundering, fraud).
Security Risks – Wallets and exchanges can be hacked.
No Consumer Protection – No refunds or chargebacks like in banking.
High Energy Consumption – Especially in proof-of-work systems like Bitcoin.
Complexity – Not user-friendly for non-technical people.

No, the Reserve Bank of India (RBI) does not approve cryptocurrencies as legal tender.

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