What is cryptocurrency? Beyond Bitcoin

Definition

A cryptocurrency is a digital asset whose ownership and transfers are recorded on a blockchain and secured with cryptography. The "crypto" comes from cryptography.

The main types

Everything other than Bitcoin is often lumped together as altcoins.

Thousands of coins, very few survivors

Launching a new token takes little skill or money, so new ones appear daily. Most of them:

• run purely on speculation with no real use,
• are pumped by their creators, who then sell their own holdings and vanish (a "rug pull"),
• or become nearly worthless within days.

"New coin, buy now for 10x" is one of the most common forms of crypto fraud. More in how to spot crypto scams.

Crypto versus ordinary digital money

Money in bKash or Nagad is digital too, but it is Bangladeshi taka. A regulated company keeps the records, under Bangladesh Bank's supervision. Crypto is recorded by a decentralised network. No central bank stands behind it, and there is no mechanism to reverse a mistaken payment.

A central bank digital currency (CBDC) is something else again: a digital form of a country's official currency, issued by its central bank.

Key points

• Crypto means digital assets on a blockchain; Bitcoin is just one example.
• Most new tokens do not survive, and many are outright scams.
• Mobile-banking money and crypto are not the same thing.