What Is Cryptocurrency?

Curious about Bitcoin, blockchain, or why everyone’s talking about crypto? From digital coins to billion-pound pizzas, this blog breaks down what cryptocurrency really is, how it works, and why it matters.

Whether you’re a total beginner or just crypto-curious, this is your quick guide to one of the most talked-about financial revolutions.

Cryptocurrency is a type of digital or virtual currency that exists only in electronic form. Unlike traditional money such as pounds, euros, or dollars, which are issued and regulated by governments and banks, cryptocurrency is not controlled by any central authority. It has no physical coins or banknotes and is not recognised as legal tender, meaning businesses are not required to accept it as payment.

How does Cryptocurrency work and what is it?

Cryptocurrencies operate on a peer-to-peer system. This allows anyone, anywhere in the world, to send or receive payments without needing approval from a bank or financial institution. All transactions are recorded on a public ledger called the blockchain, making them transparent and traceable, unlike most traditional financial systems where transactions remain private.

Bitcoin: The first Cryptocurrency

The first and most well-known cryptocurrency is Bitcoin, created in 2009 by an anonymous individual (or group) under the name Satoshi Nakamoto. In its early days, Bitcoin had little to no monetary value. But over time, its popularity grew as major companies and influential figures began accepting it as a valid form of payment. Today, one Bitcoin is worth over £82,000!

A word of caution

Despite its popularity, cryptocurrency is known for being extremely volatile. Prices can swing dramatically based on market demand, global events, regulation, production costs, and media coverage. As such, many financial experts recommend only investing money you can afford to lose.

There are now over 25,000 different types of cryptocurrencies in existence – a number that continues to grow rapidly.

Did you know?

In 2010, the first notable retail purchase using cryptocurrency took place when a man in Florida paid 10,000 Bitcoins for two Papa John’s pizzas. At the time, that was worth about $40. Fast forward to today, and that amount of Bitcoin would now be worth over $1 billion!

Want to learn more?

Curious about how cryptocurrency works and how it could impact your finances or career? Our adult course, Bitcoin & Cryptocurrency: Boomers to Zoomers, starts this September. Whether you’re brand new to the concept or looking to deepen your knowledge, this course will help you understand the world of digital currencies and how to navigate it safely.