Cryptocurrency is a collective term for any project that uses coins or tokens and uses cryptography for security reasons. Cryptocurrency, sometimes also called crypto-money, is a digital means of payment based on cryptographic tools such as blockchains and digital signatures.
As a payment system, cryptocurrencies should be independent, distributed and secure. They are not currencies in the true sense. In 2009 Bitcoin was the first cryptocurrency to be publicly traded. Through cryptographically secured protocols and decentralized data storage, cryptocurrencies enable digital payment transactions without central authorities such as banks.
Cryptocurrencies: predictable money on the blockchain
The possession of a cryptological key represents the ownership of cryptologically signed credit balances in a joint accounting system in the form of a separate storage form (blockchain). As a rule, a predetermined number of currency units is collectively generated by the entire system, whereby the rate is predetermined and published or limited by the cryptographic mode of generation.
Thus, an essential difference between most cryptocurrencies and everyday money is that a single party alone is not able to accelerate, impair or in any way substantially misuse the production of currency units. Cryptocurrencies do not require a central bank and are therefore not subject to any authority or other organization. Due to their decentralised structure, cryptocurrencies, unlike central bank money, do not generally have a single point of failure that could endanger or even manipulate the currency. However, this has to be put into perspective in that some crypto-currencies are produced quasi-centrally by owner-managed, private-sector companies, such as Ripple.