Cryptocurrency Advantages - Disadvantages

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What is cryptocurrency?

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Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates on a technology called blockchain, which is a decentralized ledger.

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What is a key benefit of using cryptocurrency?

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Cryptocurrency offers increased security and privacy for users, as transactions are encrypted and can be conducted anonymously.

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What does it mean for cryptocurrency to be decentralized?

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Decentralization means that cryptocurrency is not controlled by any central authority, such as a government or financial institution, allowing for peer-to-peer transactions.

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What is a common danger associated with cryptocurrency?

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Lack of transparency in transactions can lead to fraud and scams, as users may not have full visibility into the transaction history.

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What are phishing scams in the context of cryptocurrency?

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Phishing scams involve tricking individuals into providing sensitive information, such as private keys or passwords, often through fake websites or emails.

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What is the significance of blockchain technology in cryptocurrency?

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Blockchain technology ensures the integrity and security of transactions by creating a tamper-proof record of all transactions across a network.

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What does it mean for cryptocurrency transactions to be irreversible?

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Irreversible transactions mean that once a transaction is confirmed on the blockchain, it cannot be undone or reversed, providing finality.

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What are high transaction fees in cryptocurrency?

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High transaction fees can occur during periods of network congestion, making it expensive to send or receive cryptocurrency.

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What is social engineering in the context of cryptocurrency theft?

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Social engineering involves manipulating individuals into divulging confidential information, often leading to unauthorized access to their cryptocurrency wallets.

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What is a common misconception about cryptocurrency?

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A common misconception is that cryptocurrency is completely anonymous; while it offers privacy, transactions can still be traced on the blockchain.