DEFINITION of 'Cryptocurrency'

A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency is that it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. The anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities such as money laundering and tax evasion. The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009. Bitcoin's success has spawned a number of competing cryptocurrencies such as Litecoin, Namecoin and PPCoin.

BREAKING DOWN 'Cryptocurrency'

A major drawback of cryptocurrencies is that because they are virtual and do not have a central repository, a user’s digital cryptocurrency balance can be wiped out by a computer crash if a back-up copy of the holdings does not exist.

  1. Bitcoin

    A digital or virtual currency that uses peer-to-peer technology ...
  2. Digital Gold Currency - DGC

    An electronic, private currency backed by gold bullion. Companies ...
  3. Functional Currency

    The primary type of money that a company uses in its business ...
  4. Currency Symbol

  5. Key Currency

    The currency used as a reference in an international transaction ...
  6. Reciprocal Currency

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