What is cryptocurrency in simple words

Cryptocurrency is a digital unit, the issue of which takes place on the Internet, and the principles are based on cryptography. The creation of all cryptomonets is based on the blockchain technology-a chain of blocks ordered according to certain rules, the immutability of which is ensured by the use of cryptography. All transactions are closed and with the use of keys. It is necessary to distinguish between the concept of "cryptocurrency (coin)" and "token". The token does not use its own blockchain and is created on a third-party platform (for example, Ethereum) according to a standard template.

In simple terms, a cryptographic currency is a means of payment that exists exclusively in electronic form and represents a certain mathematical code. In the process of circulation of these assets, an electronic signature is used, encrypted using cryptographic methods-hence the name. Individual units of cryptocurrencies are called coins (coins, coins). These coins exist only on the Internet and do not have any physical embodiment.

Currently, there are a huge number of cryptomonets. As of March 27, 2021, there are more than 1,900 cryptocurrencies and tokens that are traded on exchanges and have a block chain. Most people know only the most popular of them: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Tron (TRX), without knowing about the existence of other cryptocurrencies on which you can make good money.

The official status of cryptocurrencies as a means of payment is recognized in Japan, thus legalizing their use. This event played a major role in the growth of the cryptocurrency exchange rate throughout 2017. Today, China is the largest market in terms of cryptocurrency trading volume, followed by the United States.