Cryptocurrency
A digital or virtual currency secured by cryptography and typically operating on a decentralized blockchain network.
What is Cryptocurrency?
Cryptocurrency is a digital form of money that uses cryptographic techniques to secure transactions, control the creation of new units, and verify transfers — without relying on a central authority like a government or bank. Most cryptocurrencies operate on decentralized blockchain networks where transactions are validated by participants (miners or validators) rather than a central institution. Bitcoin was the first cryptocurrency (2009); thousands of others ('altcoins') have since emerged. Cryptocurrencies can serve as a medium of exchange, store of value, or programmable money (via smart contracts). They are highly volatile, largely unregulated in many jurisdictions, and subject to significant speculative activity. Tax treatment in the US treats crypto as property, not currency.
Example
Bitcoin's price rose from under $1 in 2010 to nearly $69,000 in November 2021 — a 69,000x increase — before falling to roughly $16,000 in late 2022 and recovering above $100,000 in late 2024. This volatility profile differs fundamentally from traditional currencies, which central banks manage to maintain stability.