Cryptocurrency is a type of digital currency whose internal accounting units are provided by a decentralized payment system (there is no internal or external administrator or any equivalent) operating in a fully automated mode. Cryptocurrency itself does not have any special material or electronic form — it is just a number indicating the amount of accounting units recorded in the corresponding position of the information packet of the data transmission protocol and often is not even encrypted, like all other information about transactions between the system's addresses.

Allegorical representation of cryptocurrency (in the middle is the symbol of the most famous cryptocurrency, Bitcoin)

The term cryptocurrency became established after the publication of the article on the Bitcoin system 'Crypto currency' published in 2011 in Forbes magazine. Both the creator of Bitcoin and many other authors used the term 'electronic cash'.

Cryptographic methods are involved in the mechanisms of generating an address and verifying the authority to operate with it (digital signature based on a public key system, access is available only to the holder of the corresponding secret key for that address), as well as the formation of a transaction package and its interconnection with other packages (sequential hashing that makes it impossible to change information about the amount of cryptocurrency). In the system, there is no information about the owners of addresses or the fact of creating an address (an address can be generated completely autonomously, even without 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 has not been 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 their economic conditions and consequences, payments made with cryptocurrency are more similar to cash payments than to non-cash payment options, although cryptocurrencies are primarily developed for remote purchases (for example, via the Internet).

Payment (transfer of cryptocurrency between addresses) occurs without intermediaries and is irreversible — there is no mechanism to cancel a confirmed operation, including cases when a payment was sent to an incorrect or nonexistent address, or when the transaction was made by third parties who became aware of the private key. Cryptocurrency cannot be blocked (seized, confiscated) at a specific address or overall, even temporarily; it always remains at the disposal of the owner of the private key to that address. However, the technology of multi-signature allows for the involvement of a third party (an arbitrator) and the implementation of the possibility of returning funds under agreed conditions. Essentially, the movement of funds can occur against the will of one of these three parties. Special scripting languages allow for the description of more complex conditions (smart contracts). The problem of double spending inherent in electronic payments is solved using technologies such as blockchain, directed acyclic graphs, consensus ledgers, and others. Transaction information is typically not encrypted and is available publicly without registration in the system.

The rules for forming a new amount of cryptocurrency (issuance) are initially set by the protocol. They usually have a lottery-like nature, influenced by various factors such as the speed of solving the established task (mining) or the amount of ownership of a given resource (forging). In some cases, part or all of the declared volume of cryptocurrency is initially formed and distributed by organizers through subscriptions (ICO). Usually, only one technology is used, but some cryptocurrencies use combinations of them. Discussions are ongoing about the economic essence and legal status of cryptocurrencies. In different countries, cryptocurrencies are considered as a means of payment, a specific commodity, a security, an electronic asset, and may have restrictions on circulation (for example, a ban on operations with them for banking institutions).

As of June 2024, Henley & Partners estimates that there were 172,300 cryptocurrency millionaires in the world.