What is cryptocurrency?

A plain-English guide for complete beginners.

Cryptocurrency is digital money that exists only as records on a shared computer network. There are no coins or notes, and no bank in the middle keeping the books. Instead, thousands of computers around the world keep identical copies of one ledger, and agree together on every change to it.

How is it different from ordinary money?

When you pay with a bank card, your bank checks you have enough money, adjusts two balances and tells the shop the payment went through. You trust the bank to keep accurate records. With cryptocurrency, the network itself does that job. Anyone can send value to anyone else with just an internet connection, and no single company or government runs the system.

The trade-off is responsibility. If you lose access to your own crypto, or send it to the wrong address, there is usually no customer service line that can reverse it.

Where does the "crypto" come from?

It refers to cryptography, the mathematics used to protect the system. Every owner has a private key, a secret code that proves they own their coins and lets them approve payments. Keep it safe and private, because whoever holds it controls the money.

Different kinds of cryptocurrency

Bitcoin was the first, launched in 2009. It is mainly used as a store of value and a way to move money without intermediaries. Its supply is capped at 21 million coins.

Ethereum and similar platforms go further. They let developers build programs, called smart contracts, that run on the network, powering things like lending apps and digital collectables.

Stablecoins are designed to hold a steady value, usually tied to a currency such as the US dollar. People use them to move money around without the wild price swings of other coins.

Everything else covers thousands of other coins and tokens, from serious technical projects to jokes. Many will fail or fade away.

Why do prices move so much?

Crypto prices are driven by supply, demand, news and sentiment, and the market trades around the clock. Without traditional measures like company profits to anchor them, prices can rise or fall by double-digit percentages in a day. That is why the rates table on this site is worth a look, and also why caution matters.

Before you go further

Cryptoassets are high risk and you could lose everything you put in. Learn how the technology works and how buying works before spending a penny.