The fast-moving cryptocurrency industry keeps investors, observers and regulators on their toes. Forbes brings you cutting-edge crypto news and insights, along with high-profile interviews, explainers and unique stories.
A new paradigm in money and finance is gaining traction, thanks to digital currencies built on a foundation of blockchains, cryptography and financial incentives rather than the whims of trusted third parties like central banks or Wall Street. Proponents say this paves the way for a global, peer-to-peer payment system free of the need for intermediaries. But critics say it empowers criminals, terrorists and rogue states, suffers from drastic market volatility, stokes inequality, is hard to secure, and consumes enormous amounts of energy.
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Bitcoin is the most famous example, but there are thousands of different digital currencies out there, ranging from obscure ones that were created as jokes to those with legitimate use cases. They all share the attribute of being based on blockchain technology, which verifies and records transactions in an immutable and uncensorable manner.
Many cryptocurrencies are volatile, but some can claim to be more stable because they are backed by traditional assets like gold and fiat currencies. They are referred to as “stablecoins.” Others, including bitcoin itself, claim a fixed price, such as $1 per coin. But these tokens can lose value if their underlying assets rise or fall, as happened during the stock market turmoil in 2022. The popularity of cryptocurrencies stems largely from the fact that they can be transferred relatively quickly and cheaply, even across borders, and without the need for a bank to approve the transaction or charge a fee. They also offer the promise of privacy, though most transactions are not truly anonymous because they leave a digital trail that law enforcement agencies can track.