A beginner's guide to cryptocurrency
In recent years, cryptocurrency has transformed from a niche concept to a mainstream topic of conversation and a financial vehicle that merits the attention of consumers and investors alike. One may have heard about the latest advancements in digital finance on the news, but might not know exactly what cryptocurrency means and how it all works.
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency that is secured by cryptography. This makes it nearly impossible to counterfeit or double-spend. The term “crypto” in cryptocurrency refers to the cryptographic techniques used to secure the network and verify any transactions. Charles Schwab says crypto can be used for internet-based electronic payments or as a store of value.
Does crypto have intrinsic value?
The idea of digital cash is nothing new. Credit cards, PayPal, Venmo, and other payment facilitators have been providing easy, traceable electronic transactions for some time. But unlike Venmo and other services offering transactions settled using traditional “fiat” currencies, like the U.S. dollar or euro issued by governments and managed by central banks, cryptocurrency is considered a “non-fiat” medium of exchange.
Crypto has no intrinsic value. They function independently of any government or central bank, instead using unique algorithms to record transactions and determine supply, says Charles Schwab.
How does cryptocurrency pricing work?
Crypto are fungible, meaning the value remains the same when bought, sold or traded. The market capitalization of crypto depends on the number of coins in circulation. Like other things, it is beholden to supply and demand dynamics. Scarcity can influence value.
What is blockchain technology?
Cryptocurrencies are based on blockchain technology, says Coursera. Blockchain is a digital, public and immutable ledger. Every transaction is recorded as a “block” of data. Once a block is filled with transaction data, it’s added to the end of a “chain” of existing blocks, creating a chronological and permanent record. Having a public ledger removes the need for a central authority to confirm the accuracy of a database or to clear transactions.
Blockchains are not only used for payments. They can help create “smart” contracts, which are executed automatically once the agreed upon terms and conditions are fulfilled. They also can manage supply chains and offer financial services.
What is the speed, cost and accessibility of crypto?
Crypto investing and other crypto needs are open to anyone with internet access and a device. Cryptocurrency blockchain transactions cost a few dollars or even just pennies to make. The speed at which transactions can be made is very fast, meaning assets can be moved worldwide just about instantly.
What is bitcoin?
Bitcoin is the first type of cryptocurrency, and perhaps the most well-known. Bitcoin was created in 2009 by an anonymous entity known as Satoshi Nakamoto. It remains the largest cryptocurrency, and is often referred to as “digital gold” due to its role as a store of value. Additional types of crypto include Ethereum, Cardano, USDC, Ripple, Litecoin, Solana, and Tether.
As of mid-2025, it was estimated that there were more than 617 million cryptocurrency users worldwide, representing approximately 4 percent of the global population, according to Demandsage data reporting. This number has grown exponentially, far outpacing the growth of traditional payment methods.