Updated October 2026 — educational introduction. Cryptocurrency and other crypto-assets are digital assets that may be transferred or held using cryptographic systems. Some operate on decentralized networks, while others rely on identifiable issuers or intermediaries; the specific design matters. A transaction recorded on a blockchain does not guarantee an asset has stable value, that a service provider is trustworthy or that a buyer has legal protections comparable to a bank deposit. Before considering an investment, read the Norwegian Financial Supervisory Authority’s crypto risk guidance. It explains that crypto markets can be highly volatile and consumer protections vary by asset and provider, even where regulatory requirements apply. This article is general education, not financial advice.

Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership. Despite their name, cryptocurrencies are not considered to be currencies in the traditional sense, and while varying treatments have been applied to them, including classification as commodities, securities, and currencies, cryptocurrencies are generally viewed as a distinct asset class in practice. Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens, or other such reward mechanisms.

Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC). When a cryptocurrency is minted, or created prior to issuance, or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.Traditional asset classes like currencies, commodities, and stocks, as well as macroeconomic factors, have modest exposures to cryptocurrency returns.

The first decentralized cryptocurrency was Bitcoin, which was first released as open-source software in 2009. Cryptocurrency counts and market valuations change rapidly; figures from older articles should not be treated as current. Verify any market figures independently before relying on them