What is Cryptocurrency?
Cryptocurrency is a digital currency that facilitates secure transactions. The key difference compared to traditionally currencies such as pounds and dollars is that cryptocurrency is decentralised. When talking about crypocurrency, traditional currencies are often referred to as ‘fiat’. There are 100s of different types, with Bitcoin being the most popular one. Other popular currencies are Ethereum, Ripple, Bitcoin Cash and Cardano. Bitcoin and other cryptocurrencies are legal, however due to anonymity and other factors, some governments around the world are looking to introduce regulations to limit/govern the use.
Why would you want it?
In the UK right now, there are a limited number of places you can spend or that accept cryptocurrency. For other countries, there are more. In the future, it’s expected that around the world people will use cryptocurrency to buy all sorts – from physical goods to online services.
Of course the other reason you may want it is for investment / trading purposes. The basic concept is to buy the currency with the aim that the value will increase and at a certain point to sell it and therefore have made a profit / gain. See How to buy and trade Cryptocurrency for more details.
Cryptocurrency can be fairly volatile though and it’s common for the price to increase or decrease by double digit percentages in a single day. This brings risk, but also potential reward.