A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
A cryptocurrency is a form of digital asset generally intended to be used as a medium of exchange in much the same way traditional currencies are. The potential applications of the underlying technology, known as the blockchain, are however ever-expansive. Cryptocurrencies rely upon the cryptography used within a blockchain; the way in which cryptography is used alongside certain other protocols ensures that these assets have certain key characteristics. At their core, cryptocurrencies offer security and transferability inside of a self-validating system. For more information, check out our primer on the blockchain.
Cryptocurrencies are also often held as assets by investors who expect it to increase in value over time. They first came to prominence when the first decentralized cryptocurrency, Bitcoin, was created in 2009 by the anonymous person or persons, Satoshi Nakamoto. Since then, multiple alternative cryptocurrencies (or 'altcoins') have been created and cryptocurrencies have seen increasingly widespread adoption.