What Is Cryptocurrency?: Definition and Examples Cryptocurrency
What Is Cryptocurrency?: Definition and Examples Cryptocurrency
What Is Cryptocurrency?: Definition and Examples Cryptocurrency
Cryptocurrencies can be exchanged for one another or for fiat currencies such as
the U.S. dollar, but they are usually not backed by governments and are not yet
considered legal tender.1
Learn how cryptocurrencies work, how they came about, and what to know
before investing in them.
The idea of cryptocurrency was first introduced in 1998 by Wei Dai, who talked
about using cryptography to create and transact a new form of money, rather
than rely on a central authority to do that.
Bitcoin, the oldest and most well-known cryptocurrency, is the first practical
iteration of that concept. Bitcoin was first introduced in 2009 through a white
paper authored by Satoshi Nakamoto.2
While the identity of Nakamoto remains a mystery, the concept of a decentralized peer-to-peer
electronic payment system that does not depend on banks and other financial institutions has caught
on.
As of July 24, 2021, there were more than 11,000 cryptocurrencies with a global
market capitalization of over $1.3 trillion being traded on 390 exchanges,
according to CoinMarketCap..3
How Cryptocurrency Works
A simple cryptocurrency transaction is sending that cryptocurrency from one
person to another. Cryptocurrencies are stored in electronic “wallets,” and the
transfer occurs from one wallet to another.
Offers diversification
Cons
Enormous volatility
It has the attention and support of major investment banks like Goldman Sachs
and JP Morgan. It isn’t just some crazy meme for nerds on the internet. It’s a
risky investment opportunity that’s gathering interest and recognition across the
world.
Offers diversification
Cons
Enormous volatility
Pros Explained
Cons Explained