What is a cryptocurrency & how does it work?

A cryptocurrency is a digital, encrypted, and decentralized medium of exchange. Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a cryptocurrency. Instead, these tasks are broadly distributed among a cryptocurrency’s users via the internet.

What makes up a crypto asset?

While the definition is fluid, there are several features that typically make up a crypto asset: Cryptography: This is where the term “crypto” comes from. A cryptocurrency (or crypto for short) utilizes cryptography, which are techniques for securing information or communications. Cryptocurrencies use what’s called public key cryptography.

What are cryptocurrencies & crypto tokens?

Both cryptocurrencies and crypto tokens fall under this category. Cryptocurrency: These crypto assets are also called crypto coins and are those native to blockchains. So for instance, bitcoin (BTC) is the native cryptocurrency of the Bitcoin blockchain and ether (ETH) is the native cryptocurrency of the Ethereum blockchain.

Are cryptocurrencies governed by a central bank?

Cryptocurrencies (or “crypto” for short) are decentralized currencies, meaning they’re neither issued nor governed by a central bank. Some cryptocurrencies are issued by their developers, while others are generated by their respective network algorithms. Crypto are digital assets —they have no tangible form.