Cryptocurrency is a digital asset transferred through computer networks, usually without a single bank maintaining the central transaction ledger.

Digital records and blockchains

Many cryptocurrencies use a blockchain: a shared record in which transactions are grouped and confirmed according to the network’s rules. Cryptography helps participants verify ownership and authorize transfers. Different projects use different validation methods, so the word cryptocurrency does not describe one uniform technology.

Wallets, keys and exchanges

A wallet manages the credentials used to control digital assets. The private key or recovery phrase is particularly sensitive; losing it can make funds inaccessible, while sharing it can allow another person to transfer them. Exchanges provide buying and selling services but introduce their own custody, security and regulatory risks.

Risk comes with the technology

Prices can be highly volatile, transactions may be difficult to reverse and protections vary by jurisdiction and platform. This overview is educational, not investment advice. Blockchain’s wider uses explains the underlying recordkeeping concept, and the 2021 cryptocurrency outlook is preserved as a historical perspective rather than a current forecast.