Cryptocurrencies are a type of digital money that use cryptography to secure transactions, manage issuance, and verify ownership. One of their key features is that they’re not issued or controlled by any central authority — no governments or companies behind the scenes.
As digitalization changed many parts of our lives, money was no exception. Debit cards, bank transfers, and other digital tools helped us move away from cash and made day-to-day transactions simpler.
But until recently, using money without a central authority in the middle wasn’t possible. Whether it's a bank, a card issuer, or a government through its central bank — we’ve always needed intermediaries to make things work and protect us from fraud.
One of the biggest challenges? Preventing something called double-spending — when someone tries to use the same digital money twice. Before 2008, the only way to prevent this was trusting a third party.
The launch of Bitcoin changed everything. The first cryptocurrency came with a decentralized nature, removing the need for middlemen. It’s a transparent, borderless, censorship-resistant system open to anyone.
Cryptocurrencies are part of a movement that’s reshaping how we think about value, money, and trust — with real impact on many aspects of our lives.
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How do cryptocurrencies work?
There are thousands of cryptocurrencies out there, each with different use cases, degrees of decentralization, and levels of autonomy.
Read more: Why are there different cryptocurrencies?
Still, most share some core traits — like using blockchain technology to record transactions and relying on distributed consensus to validate them.
A blockchain is like a public, decentralized database where all crypto transactions are stored. Every transaction has a timestamp and is recorded permanently — it can’t be changed or deleted.
Who validates transactions? The network itself. Each node (or participant) stores a copy of the blockchain and adds new transactions as they happen. Together, they validate operations and help prevent fraud or duplication.
While each cryptocurrency may use different methods to achieve this, they all rely on a consensus algorithm to keep the network running securely.
This distributed consensus is what makes crypto different from any digital money controlled by a few. It’s also what makes it resilient: even if one part of the system is hacked, the rest stays secure.
Why is it called "crypto"? Because cryptography is what powers the whole system — securing transactions, controlling supply, and verifying ownership.
Since Bitcoin, the ecosystem has grown with new projects using blockchain tech to solve different problems. Many new tokens were born from these projects, gaining value as people exchanged them.