What is Cryptocurrency?

Cryptocurrencies are essentially digital assets that can be used as a medium of exchange. They
leverage blockchain technology to gain transparency, immutability, and decentralization. The
first and most well-known cryptocurrency is Bitcoin, which was created in 2009 by an
anonymous person (or group of people) known as Satoshi Nakamoto.
Key Features of Cryptocurrency
Cryptocurrencies have several key features that set them apart from traditional currencies:
1. Decentralization: Unlike traditional currencies, which are controlled by central banks,
cryptocurrencies are decentralized. This means that they are not controlled by any
government or authority.
2. Anonymity: Cryptocurrencies offer a certain level of anonymity. While all transaction
data is recorded on the blockchain, the identities of the parties involved are encrypted.
3. Security: Cryptocurrencies use cryptographic techniques to secure transactions and
control the creation of new units.
4. Limited Supply: Most cryptocurrencies have a limited supply, meaning that there is a
maximum number of coins that can ever be created. This is in contrast to traditional
currencies, which can be printed by central banks as needed.
Types of Cryptocurrency
While Bitcoin was the first cryptocurrency and remains the most well-known, there are now
thousands of cryptocurrencies available. These are often referred to as ‘altcoins’ (alternative
coins). Some of the most popular altcoins include Ethereum, Ripple, and Litecoin.
Each cryptocurrency operates a little differently and has its own unique features. For example,
Ethereum allows for the creation of ‘smart contracts’, which are self-executing contracts with
the terms of the agreement directly written into code.
In the next section, we will delve into the basics of Token Economics, an essential aspect of
understanding and investing in cryptocurrencies. By the end of this module, you will have a
solid foundation in cryptocurrency, setting the stage for the more advanced topics to come.