Cryptocurrency

Cryptocurrency emerged in January 2009, when the pseudonymous Satoshi Nakamoto launched Bitcoin, turning a 2008 whitepaper into the first working peer-to-peer digital money. Rather than being issued by a central bank, a cryptocurrency is created and tracked by a distributed network of computers that all keep matching copies of a shared ledger, the blockchain. Ownership is proven with a cryptographic key pair: a public address anyone can send funds to, and a private key only the holder controls to authorize spending.

Networks agree on which transactions are valid through a consensus mechanism. Bitcoin and several older coins rely on proof-of-work mining, while most newer networks, including Ethereum since 2022, use proof-of-stake, where validators lock up coins rather than burn electricity to secure the chain. A "coin" typically runs on its own blockchain, such as Bitcoin or Ether, while a token is issued on top of an existing one, like the thousands of ERC-20 tokens built on Ethereum.

Tens of thousands of cryptocurrencies now trade on exchanges, though the vast majority of all coins and tokens ever created have failed or been abandoned. Bitcoin still commands roughly half of total crypto market value, reflecting its position as the sector's reserve asset. Adoption varies sharply by jurisdiction: only El Salvador and the Central African Republic have ever granted Bitcoin legal-tender status, while most governments instead regulate cryptocurrency as property or a financial instrument rather than official money. Volatility, custody risk, and evolving regulation remain the main considerations for anyone holding or transacting in it.