Cryptocurrency

Definition

A cryptocurrency is a digital asset whose operation uses cryptographic techniques to authorize transfers and maintain records under a network's rules. Bitcoin and ether are native assets of their respective blockchains, while many other assets are tokens issued through applications on an existing chain. The category contains substantial differences in decentralization, supply policy, privacy, governance, and security. Cryptography can establish that an authorized key approved a transfer, but it does not by itself guarantee honest issuers, accurate prices, or useful economic rights. Most public cryptocurrency ledgers expose transaction information rather than encrypting every payment. Holding cryptocurrency also differs from holding an account balance at an intermediary, because the latter introduces the intermediary's custody and withdrawal arrangements. Understanding an asset requires identifying its network, the software that enforces its rules, and the people or mechanisms capable of changing those rules.