What is a cryptocurrency?

Cryptocurrency is a decentralized digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of new units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

It is organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions.

Bitcoin, created in 2009, was the first and is the most well-known cryptocurrency. Other cryptocurrencies, such as Ethereum, Litecoin, Cardano, followed suit. All cryptocurrencies are based on blockchain technology, a distributed ledger enforced by a disparate network of computers. Bitcoin is currently the largest blockchain network, followed by Ethereum.

 Cryptocurrency is not backed by any government or central bank. Its value is completely derived by market demand for it.

While there are a number of goods and services that you can buy with crypto, particularly with Bitcoin or Ethereum, you may also use crypto as an alternative investment option outside of stocks and bonds.

Cryptocurrencies can be purchased and traded through crypto exchanges, such as Binance, Coinbase, Kraken and many others.


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