Cryptocurrency

A cryptocurrency is a digital asset that uses cryptography and a shared ledger, usually a blockchain, to record who owns what and to let people transfer value without relying on a bank or payment company to approve each payment. Bitcoin, launched in 2009, was the first widely used cryptocurrency; thousands have followed.

Most cryptocurrencies share a few features. Ownership is controlled by private keys rather than by an account at an institution. Transactions are checked by a network of independent computers following common rules. New units are created according to a published schedule, for example through mining or staking rewards. And prices are set by open trading, which makes them far more volatile than national currencies.

"Cryptocurrency" is often used loosely for every token on a blockchain, including stablecoins, governance tokens and memecoins. These differ hugely in purpose, risk and how decentralised they really are, so it pays to look at each one individually.