Cryptocurrencies are decentralized digital currencies that use cryptographic technology to enable secure, peer-to-peer transactions without relying on traditional financial institutions. Unlike fiat currencies, cryptocurrencies operate on blockchain networks, ensuring transparency, security, and decentralization. Popular cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), and stablecoins like USDC and USDT.

How Cryptocurrencies Work:
Cryptocurrencies function through blockchain technology, which records all transactions in a decentralized ledger. Key components include:

Blockchain Ledger: A distributed, immutable record of all transactions.
Decentralization: Transactions are verified by a network of nodes instead of a central authority.
Consensus Mechanisms: Algorithms like Proof of Work (PoW) and Proof of Stake (PoS) validate transactions.
Cryptographic Security: Public and private keys secure transactions and digital wallets.
Smart Contracts: Self-executing agreements that automate processes within cryptocurrency networks.
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By using these technologies, cryptocurrencies enable secure and trustless financial transactions.