FAQs about Cryptocurrency

Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike traditional money, it operates on decentralized networks based on blockchain technology.

Cryptocurrencies run on blockchain technology, where transactions are recorded in a decentralized ledger. They use cryptographic techniques to ensure secure and transparent transfers without a central authority like a bank.

A blockchain is a distributed, immutable digital ledger that records transactions across many computers. It ensures data integrity and transparency.

The most well-known cryptocurrencies include:

• Bitcoin (BTC)
• Ethereum (ETH)
• Binance Coin (BNB)
• Solana (SOL)
• Cardano (ADA)

Legality varies by country. In many nations, it's legal to buy, sell, and trade cryptocurrencies, but some restrict or ban them. Always check local regulations.

Cryptocurrency can offer high returns but is also highly volatile and risky. Investors should do thorough research and never invest more than they can afford to lose.

You can buy crypto through exchanges like:

• Coinbase
• Binance
• Kraken
• WazirX (India)

You’ll need to create an account, verify your identity, and use a payment method like bank transfer or card.

Cryptos are stored in digital wallets, which can be:

• Hot wallets (online, more convenient but less secure)
• Cold wallets (offline, like hardware wallets—more secure)

Yes. Most exchanges allow users to convert cryptocurrencies into fiat currencies like INR, USD, or EUR.

Yes, in many countries crypto is taxed as capital gains, income, or both. In India, for example, profits are taxed at a flat rate of 30% (as of 2024).

Mining is the process of validating and adding new transactions to the blockchain. Miners are rewarded with new coins for solving complex mathematical problems.

Yes. Crypto markets are volatile, and you can lose money due to price drops, scams, or lost wallet access. Always use secure practices.

Common scams include:

• Fake crypto exchanges
• Pump and dump schemes
• Phishing attacks
• Fake giveaways on social media

Crypto is expected to become more mainstream, with increasing regulation, institutional adoption, and use in Web3, gaming, and finance.