Cryptocurrency is a type of digital currency, the accounting of internal units of account of which is provided by a decentralized payment system (there is no internal or external administrator or any analogue of it), operating in a fully automated mode. Cryptocurrency itself does not have any special material or electronic form - it is simply a number representing the quantity of these accounting units, which is recorded in the corresponding position of the information packet of the data transmission protocol and often is not even subjected to encryption, just like all other information about transactions between the addresses of the system.
Allegorical representation of cryptocurrency (in the center is the symbol of the most well-known cryptocurrency Bitcoin)
The term cryptocurrency became established after the publication of an article on the Bitcoin system 'Crypto currency' (Cryptographic currency), published in 2011 in Forbes magazine. At the same time, both the creator of Bitcoin and many other authors used the term 'electronic cash.'
Cryptographic methods are involved in the mechanisms for generating addresses and verifying authorizations for transactions with them (digital signature based on a public key system, access is available exclusively to the holder of the corresponding private key for that address), as well as the formation of transaction packets and their interconnection with other packets (sequential hashing that makes it impossible to change information about the amount of cryptocurrency). At the same time, the system has no information about the owners of the addresses or the fact of creating an address (an address can be generated completely autonomously, without even connecting to the network and without reporting anything to the network subsequently) - that is, there is no mechanism to verify that the recipient's address actually exists or that the access key to it is not lost. The lack of direct information about the owner is the basis (but not limited to this) for the anonymity of transaction participants. In terms of economic conditions and consequences, cryptocurrency payments are more similar to cash payments than to cashless payment options, although cryptocurrencies are primarily developed for remote purchases (for example, over the Internet).
