Skip to main content

What is Cryptocurrency?

A cryptocurrency is digital money. There are many cryptocurrencies, just like there are many currencies like the dollar, the euro, and the ruble.

Each cryptocurrency runs on its own blockchain, because every currency needs its own record of transactions.

Imagine I had one dollar and one euro, and I spend my dollar.

Cobalt Web Wallet

Cobalt is a secure and easy-to-use web extension wallet for the Horizen cross-chain ecosystem. Trustworthy, reliable and built to easily manage your assets.

The dollar blockchain records this transaction, identifies the new owner, and that I don't have that dollar anymore.

On the other hand, this transaction does not affect the blockchain for all the euros.

If you own one ZEN, this means there is a transaction recorded on the blockchain where you received one ZEN, or several transactions that show you received a total of one ZEN.

The Benefits of Cryptocurrencies

When you send money to an online shop or a friend, you are asking the bank to send the money on your behalf.

What if the bank isn't open, like on a Sunday, or refuses to send the money for some reason?

Cryptocurrencies are digital cash. You are in control of it and can give it to anyone, at any point. It doesn't matter if the other person is standing next to you or on the other side of the world; the transfer will take the same amount of time to complete. There are no opening hours and there is no one who can stop you from using your money the way you see fit. Another benefit is that you can choose if you want to do a transaction privately or publicly. Sometimes you don't want anyone to know what you are spending money on. With certain cryptocurrencies, you have the option to shield the transaction from the public.

The greatest benefit might be that everyone can use cryptocurrencies. You only need an app to do so. Many people in less-developed countries don't have a bank account, and cannot send or receive money. With crypto, all they need is an app on their internet-connected smartphone and they can start transferring money the way most people do already.

To learn more about cryptocurrencies, read our academy article about Altcoins.