Cryptocurrency

A cryptocurrency is a digital asset that uses cryptography and a blockchain to record ownership and transfer value, without depending on a bank or government to issue it or keep the books.

How it works

Ownership is represented by entries on a public ledger that the whole network agrees on through a consensus mechanism. You hold the private keys that authorise spending from your addresses, and transactions are verified by the network rather than by an intermediary. New units are typically issued through mining or staking according to fixed, transparent rules.

Why it matters

Cryptocurrencies make it possible to send value over the internet directly, around the clock, across borders, with the rules enforced by code. The trade-offs are price volatility, the personal responsibility of self-custody, and an evolving regulatory landscape.

Example

Bitcoin was the first cryptocurrency; thousands of others, collectively called altcoins, have followed with different designs and goals.