Let’s face it: these days, most people have heard of crypto. It crops up in too many news reports and conversations to miss it. But if you asked most people to explain what crypto was, they’d give you a shrug — like you’re asking how gravity works.
“I’m not one of those crypto folks. Something to do with Bitcoin?”
In this article, we’ll give you a more thorough answer, and explain exactly what cryptocurrency is — no hype, buzz or spin. We’ll also discuss some other key concepts, like Ethereum and blockchain, and where they fit in.
What is cryptocurrency?
Cryptocurrency is a digital currency. It’s different from traditional currency in that it has no physical form and it’s not issued by a central authority (like a bank or government). There’s a lot of other differences, but these are the two biggest ones.
Since it hasn’t been given any intrinsic or legislated value by an authority, it’s only worth what people are willing to pay for it. This is why cryptocurrencies are infamous for fluctuating in price. In contrast, something like the US dollar is a lot more stable, simply because a government has legislated it as legal tender. People know it’s not a fad (Unlike the Kanye West themed cryptocurrency “Coinye”).
So, if a government or bank isn’t involved, and there’s no physical assets being passed around, how does this whole thing even function?