What is meant by cryptocurrency?

Cryptocurrency is a digital payment system that does not rely on banks to verify transactions. It is a peer-to-peer system that allows anyone, anywhere, to send and receive payments. Instead of carrying and exchanging money in the real world, cryptocurrency payments exist as digital entries in an electronic database that describe specific transactions. When transferring cryptocurrency, transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.

Cryptocurrency gets its name because it uses encryption to verify transactions. This means that there is an advanced encoding system involved in storing and transferring cryptocurrency data between wallets and public ledgers. The purpose of encryption is to provide security and safety.

The first cryptocurrency was Bitcoin, which was established in 2009 and is still the most famous today. Much of the interest in cryptocurrencies involves trading for profit, as speculators sometimes drive prices up.