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What is cryptocurrency?
Cryptocurrency is [[digital::Something that exists in electronic form.]] money. It is made of two words. Crypto, which means to keep something protected, and currency, which can be used to buy things.
This isn’t like cash or coins that you can touch, but it can be used to buy things on the internet.The first cryptocurrency was called Bitcoin (launched in 2009).
It is still used the most. Regular money is printed and controlled by the government, but cryptocurrency is created and traded on the Internet. Many countries (e.g. China, Egypt, Bangladesh, etc.) have banned cryptocurrencies because they are outside government control.
Anyone can make bitcoins. They use a technology called a blockchain. A blockchain is a chain of blocks. Every block has some information in it. To add another block to the blockchain, you have to enter a secret code.
To get this secret code, people have to solve a very difficult mathematical puzzle. The first person who solves this puzzle gets some bitcoins as a prize!
If all this is digital, why is the environment getting affected?
Mining cryptocurrency needs lots of electricity and [[fossil fuels::Fuel such as coal/oil that formed over millions of years from parts of dead plants and animals.]]. To earn bitcoins, you solve tricky math puzzles with a super-fast computer that uses a lot of electricity.
People all over the world mine lots of Bitcoin, using tons of electricity, mainly generated from fossil fuels. Using so much electricity releases harmful gases into the air and causes [[global warming::The rise of the Earth's temperature due to certain gases like carbon dioxide.]]. This hurts our efforts to stop [[climate change::The way that Earth's weather is getting hotter, mostly due to human activity.]].
Electricity is a valuable resource. Many poor countries cannot produce enough electricity for their people. People believe that this extra electricity could be shared with them.
Are we protecting ourselves from resource-hungry cryptocurrencies?
Many people were worried about cryptocurrencies harming the environment. So, they made [[eco-friendly::Something that is not harmful to the environment.]] cryptocurrencies like Nano and Chia. They are made using less electricity. So now, we can use cryptocurrencies without hurting the environment.
Quick Revision
Digital money: Cryptocurrency is online money; Bitcoin (2009) was the first.
No government control: It’s made and traded on the Internet, not by banks.
Mining: People earn coins by solving hard math puzzles using powerful computers.
Harmful effects: Mining uses lots of electricity, causing pollution and global warming.
Eco options: New coins like Nano and Chia use less energy and are eco-friendly.
