A cryptocurrency is a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself.[1][2] At present, all cryptocurrencies are alternative currencies, as no nation has adopted a cryptocurrency alternative to fiat money. Cryptocurrency implementations often use a proof-of-work scheme to guard against digital counterfeiting. While over 30 different cryptocurrency specifications and protocols have been defined, most are similar to and derived from the first fully implemented cryptocurrency, Bitcoin.
Most cryptocurrencies are designed to gradually introduce new units of currency, placing an ultimate cap on the total amount of currency that will ever be in circulation. This is done both to mimic the scarcity (and value) of precious metals and to avoid hyperinflation.Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies are less susceptible to seizure by law enforcement.Existing cryptocurrencies are all pseudonymous, though additions such as Zerocoin have been suggested, which would allow for anonymity. (Copied from Wikipedia )
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