Cryptocurrency is an electronic money that uses technology to control how and when it is created and lets users directly exchange it between themselves, similar to cash.
Crypto- is short for “cryptography”, and cryptography is computer technology used for security, hiding information, identities and more. Currency simply means “money currently in use”.
Cryptocurrencies are a digital cash designed to be quicker, cheaper and more reliable than our regular government issued money. Instead of trusting a government to create your money and banks to store, send and receive it, users transact directly with each other and store their money themselves.
Because people can send money directly without a middleman, transactions are usually very affordable and fast.
To prevent fraud and manipulation, every user of a cryptocurrency can simultaneously record and verify their own transactions and the transactions of everyone else.
In the real world, a book used to record transactions is called a ledger. And so it is with this digital money. But unlike in the real world, with cryptocurrencies, anyone can keep their own complete copy of this ledger.
Because the data is public and maintained by many thousands of people, transactions are permanent and very secure.
With public records, cryptocurrencies don’t require you trust a bank to hold your money. They don’t require you trust the person you are doing business with to actually pay you. Instead, you can actually see the money being sent, received, verified, and recorded by thousands of people. This system requires no trust. This unique positive quality is known as “trustless”.
The first cryptocurrency was bitcoin.