What is a cryptocurrency?

A cryptocurrency is defined as a digital currency that utilizes cryptographic techniques to ensure secure transactions and to control the creation of new units. It operates on decentralized networks based on blockchain technology, which means there is no central authority or intermediary overseeing transactions. This decentralization provides advantages such as enhanced security and transparency, allowing individuals to interact directly without the need for banks or financial institutions.

The other options relate to forms of currency or trading that do not accurately capture the essence of cryptocurrency. Traditional currencies, such as those printed by governments and regulated by central banks, do not use cryptography and are not inherently decentralized. Similarly, physical currencies regulated by central banks refer to legal tender that is tangible and controlled by governmental monetary policies. Stocks, on the other hand, represent ownership in a company and are traded on exchanges, which is not applicable to cryptocurrencies. Thus, option B stands out as the accurate and comprehensive definition of what a cryptocurrency represents.