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Bitcoin and cryptocurrencies

A cryptocurrency is a digital asset designed as a medium of exchange. It uses cryptography to secure transactions as well as to control the creation of additional currency units. Cryptocurrencies are digital currencies, a subset of alternative currencies. The most popular cryptocurrency is bitcoin, and since it was invented the various new cryptocurrencies that have been created are frequently called altcoins, as shorthand for bitcoin alternative.

Bitcoin was designed as a peer-to-peer system to be used for online payments, without the need for a trusted central authority. Since its invention in 2008, bitcoin has grown into a currency, a technology, an investment vehicle and a community of users. It is in fact believed to be the first cryptocurrency, although, as mentioned earlier, similar systems did exist before. Since the bitcoin system works without a single administrator (like PayPal) or a central repository, the US Treasury has categorised bitcoin as a decentralised virtual currency. In fact, the first decentralised digital currency would be a more correct designation than the first cryptocurrency.