In the early 2000s, few people imagined that money could exist entirely in digital form—without any physical coins or bills, and without a central bank controlling it. Yet today, **cryptocurrency** has become a global phenomenon, challenging traditional ideas about finance and banking.
The first and most well-known cryptocurrency, **Bitcoin**, was launched in 2009 by an anonymous person (or group) using the name Satoshi Nakamoto. Unlike dollars or euros, Bitcoin isn't issued by any government. Instead, it relies on a technology called **blockchain**, a digital ledger that records all transactions publicly and securely. This system makes it almost impossible to alter past transactions without detection.
Cryptocurrencies offer several advantages: they allow for fast, borderless payments, lower transaction fees, and greater financial privacy. For people in countries with unstable currencies or strict banking controls, cryptocurrencies can provide access to a more open financial system.
However, there are significant risks. The value of cryptocurrencies can change dramatically within hours, making them highly volatile. Security is also a concern—if a person loses access to their digital wallet, the funds are gone forever. Moreover, since transactions are anonymous, cryptocurrencies have sometimes been used for illegal activities.
Governments and financial institutions around the world are still figuring out how to regulate this new form of money. Some countries have embraced it, while others have banned it outright. Meanwhile, others are exploring **central bank digital currencies (CBDCs)**—a kind of government-backed cryptocurrency.
Whether cryptocurrencies become mainstream or remain a niche asset, their impact is undeniable. They have sparked innovation, encouraged debate about the future of money, and pushed the financial world toward faster, more transparent systems.
Q1: What is the primary purpose of the passage?
Q2: According to the passage, what is blockchain primarily used for?
Q3: Why might some people prefer to use cryptocurrency over traditional currency?
Q4: What is implied by the statement that cryptocurrencies 'have sparked innovation'?
Q5: What does the phrase 'highly volatile' in paragraph 4 mean?
Q6: Which of the following best describes the author's tone in the passage?
Q7: Which evidence from the passage best supports the idea that cryptocurrency poses challenges for governments?
Printable Comprehension Practice
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Q1: What is the primary purpose of the passage?
✅ Correct Answer: B
💡 Reasoning: The passage outlines the history, benefits, risks, and future of cryptocurrencies.
Q2: According to the passage, what is blockchain primarily used for?
✅ Correct Answer: C
💡 Reasoning: Blockchain is described as a digital ledger used to track all cryptocurrency transactions securely.
Q3: Why might some people prefer to use cryptocurrency over traditional currency?
✅ Correct Answer: C
💡 Reasoning: The passage mentions these specific advantages of using cryptocurrency.
Q4: What is implied by the statement that cryptocurrencies 'have sparked innovation'?
✅ Correct Answer: B
💡 Reasoning: The passage suggests cryptocurrencies have influenced change in the financial industry.
Q5: What does the phrase 'highly volatile' in paragraph 4 mean?
✅ Correct Answer: B
💡 Reasoning: ‘Volatile’ is used to describe how cryptocurrency prices can change rapidly.
Q6: Which of the following best describes the author's tone in the passage?
✅ Correct Answer: C
💡 Reasoning: The author presents both pros and cons of cryptocurrencies in a neutral tone.
Q7: Which evidence from the passage best supports the idea that cryptocurrency poses challenges for governments?
✅ Correct Answer: C
💡 Reasoning: This sentence directly shows how governments are still trying to adapt to this new financial system.