What is cryptocurrency, and how does it work?
A cryptocurrency is a digital asset that is recorded on a blockchain, which is a shared database that many independent computers keep a copy of and agree on. Because every participant holds the same record and the rules for changing it are enforced by software, no single company or bank has to sit in the middle of a transfer. Bitcoin was the first working example, and thousands of other coins and tokens have been built since, most of them on top of general-purpose networks such as Ethereum.
This is the foundation the rest of the subject sits on. Once you understand what a blockchain records, how new entries are agreed on through mining or staking, and what separates a coin from a token, most of the vocabulary in crypto stops being intimidating and starts being descriptive. The terms below are the ones that appear in nearly every other subject on this site.
Cryptocurrency basics terms explained
23 definitions, each with a plain-English version, a technical version, a worked example and the mistakes beginners make.
Where this is taught
This subject sits in the Beginner path of the CryptoBipto curriculum, which runs from complete beginner to expert across four tiers. You can browse the full curriculum or read free sample lessons before signing up.
Common questions
Is cryptocurrency the same thing as blockchain?
They are not the same. A blockchain is the shared record-keeping system, and a cryptocurrency is one kind of asset recorded on it. A blockchain can carry many different assets, and some blockchains are used for things that are not currencies at all.
What is the difference between a coin and a token?
A coin is the native asset of its own blockchain, the way Bitcoin is native to the Bitcoin network. A token is issued by a smart contract running on someone else's blockchain, which is why thousands of tokens exist on Ethereum without each needing a network of their own.
Do I need to understand the technology to use crypto safely?
You do not need to read code, but you do need to understand who controls your assets, how a transaction becomes final, and what a mistake costs, because most crypto transfers cannot be reversed. Those are the points this curriculum covers first.
Related subjects
Educational only — not financial advice. CryptoBipto does not custody funds or execute trades.