What Is Cryptocurrency?

A cryptocurrency is a digital currency that is secured by a cryptographically-encrypted ledger called a blockchain. In turn, this ledger contains an immutable record of every transaction that has ever occured using the cryptocurrency.

What Makes Cryptocurrency Important

The move to digital currency has been happening since the dawn of the Internet. But these are just digital representations of existing fiat currencies, and are not a true shift from the existing status quo of our financial and monetary systems.

Banks and governments still control these assets.

But cryptocurrency is something new: a decentralized, purely digital currency that no single entity or group controls.

It is also fully anonymous. Transactions are recorded on the public ledger, but the identities of the parties involved are not revealed.

This represents a paradigm shift from our existing system, especially in the realm of financial inclusion. Cryptocurrencies can be used by anyone with an Internet connection, which gives them the potential to reach populations that are unbanked or underserved by traditional financial institutions.

Digital Gold

One of the key features of cryptocurrencies is that they are not fiat currencies. That is, they are tied to a another commodity and must be "mined", meaning that they can't be printed at will. So, like currencies tied to hard commodities like gold, they are inflation-resistant because they cannot be printed at will by central banks.