What Is Cryptocurrency?
Cryptocurrency is a form of digital asset that uses cryptographic techniques to secure transactions.
Many cryptocurrencies operate on blockchain networks, which maintain distributed records of transactions.
How a transaction is typically recorded on a blockchain network
Transfer requested
A user sends digital assets from one wallet to another.
Network verifies
Network participants check the transaction against the network’s rules.
Recorded in a block
Verified transactions are grouped and added to a shared ledger.
Record is shared
Copies of the record are held across the network, not by a single party alone.
How cryptocurrency differs from traditional currency
Issued
The rules for creating new units are set by each asset’s own design, which varies between cryptocurrencies.
Transferred
Transfers are typically made between digital wallets over a network rather than through traditional banking channels.
Stored
Held in digital wallets that rely on private keys. Losing access to a key can mean losing access to the asset.
Governed
Governance differs by asset. Some are managed by communities or protocols, others by organisations.