// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Cryptocurrency?

1 min read Updated

A cryptocurrency is a digital or virtual currency that uses cryptographic techniques for security and operates on a decentralized blockchain network, enabling peer-to-peer transfers without intermediaries.

WHY IT MATTERS

Cryptocurrencies represent a fundamental reimagining of money. Instead of central banks issuing currency and commercial banks processing transactions, cryptographic protocols handle issuance and a decentralized network handles settlement.

The crypto landscape includes: Bitcoin (store of value), Ethereum (programmable money), stablecoins (price-stable payments), and thousands of application-specific tokens. Each serves different functions in the emerging digital economy.

For developers, cryptocurrencies are programmable value — tokens that can be sent, received, locked, swapped, and governed by smart contract logic. This programmability enables the entire DeFi and Web3 ecosystem.

FREQUENTLY ASKED QUESTIONS

How many cryptocurrencies exist?
Thousands, but most have negligible usage. The top 20-50 by market cap represent the vast majority of value and activity. Many tokens are purely speculative.
Are cryptocurrencies legal?
In most jurisdictions, yes — though regulatory frameworks vary widely. Some countries embrace crypto (Singapore, UAE), others restrict it (China). Regulation is evolving rapidly globally.
How are cryptocurrencies different from digital payments?
Traditional digital payments (Venmo, bank transfers) move IOUs between intermediaries. Cryptocurrencies transfer actual digital assets peer-to-peer on a shared ledger — no intermediary holds your funds.

FURTHER READING

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