What are Cryptocurrencies?

Last Updated on March 15, 2022 by LTC Casino Editorial

Generically speaking, a cryptocurrency is a type of money – like other currencies we live with on a daily basis – with the difference that it is completely digital. Moreover, it is not issued by any government (as is the case with the euro, the real or the dollar – FIAT currency).

In practice, the terms cryptocurrency, virtual currency and digital currency have the same meaning. The former refers to cryptography, while the expressions “digital” and “virtual” refer to the intangible and abstract nature of online money.

Although Bitcoin is the best-known digital currency, the concept of cryptocurrency predates its creation. Cryptocurrencies were first described in 1998 by Wei Dai, who suggested using cryptography to control the issuance and transactions carried out with a new type of money. This would dispense with the need for a central authority, as with conventional currencies.

The logic of digital currency is the same as FIAT money. Therefore, its function is basically to allow transactions of purchase and sale of goods and services. Another possibility is the transfer of values over the internet, without the need for fees charged by financial and banking institutions.