The term cryptocurrency refers to a digital or virtual currency, meaning that it has no physical form.
And although we cannot physically see or touch cryptocurrencies such as Bitcoin, they are still able to function as a medium of exchange, i.e. a widely accepted token which can be exchanged for goods and services.
Cryptocurrencies were conceived as a viable alternative to the global centralised monetary system, allowing individuals to send and receive funds to one another without the need for intermediaries, or trusted third parties, such as banks.
In their early year's cryptocurrencies were deemed to have no intrinsic or natural value, meaning that they could not be exchanged for other commodities such as gold or silver; however, the laws surrounding cryptocurrencies are forever changing, in fact...
"On March 6, 2018, a US federal judge upheld the notion that cryptocurrencies, such as Bitcoin, are commodities and can, therefore, be regulated by the U.S. Commodity Futures Trading Commission (CFTC)." ~ Forbes
The point to note is that anyone looking to trade in cryptocurrencies should first look to understand relevant local and international laws, as legislation can vary drastically from one region to another.
And as you may know, there are two main types of cryptocurrency, coins and tokens. A topic we'll explore in more detail within our upcoming videos.
Bitcoin was the first-ever cryptocurrency, however, its success has given rise to a vast new generation of digital currencies, also referred to as alt-coins. Short for alternative coins alt-coins is a term used to describe any cryptocurrency that is not a Bitcoin.
As of January 2019, there were more than 2000 cryptocurrencies in existence, with the four most popular of these being…Bitcoin, Ethereum, Ripple and Litecoin.