So, what is cryptocurrency? Bitcoin, for example, is the most popular cryptocurrency, which is type of digital money using codes to keep it safe. Cryptocurrencies differ from typical money, such as the dollar or euro, in that they are not issued by central banks. They rely on a system called blockchain, which is sort of a shared record that tracks purchases across many computers.

Bitcoin was the very first and remains the most popular type of cryptocurrency. An individual or group going by the name Satoshi Nakamoto created it in 2009. A lot of other cryptocurrencies, called altcoins, came out after that. Each one has its own special features and uses. For a detailed look at Bitcoin’s history, check out this timeline by Investopedia.

One of the key features of cryptocurrency is that the transaction can be regarded as secure and confidential. The use of cryptography-related capabilities makes them difficult to modify, and catches the attention of those who prefer keeping money activities a secret.

Now that you know the basics of cryptocurrency, let’s find out how it really works. In the next section, we will try to break down into simple and easy words the technology behind digital currencies.

Now envision a record book, or ‘ledger,’ that’s been copied onto thousands and thousands of computers all over the world. Every time a cryptocurrency transaction happens anywhere, it is added as a ‘block’ to this shared ledger. Each block links to the one before it, creating a secure, unalterable ‘blockchain.’

Since every block has to be copied onto a big network, it is nearly impossible to alter past transactions. In order for any change to take place, all the copies in the world would have to be changed at the same time, which is practically impossible.

Transactions on Bitcoin are verified through a concept known as mining, where computers solve complex puzzles by verifying new blocks. The miners are rewarded for this in Bitcoin, hence this is the security and decentralization of this network.

Such powerful security and complete decentralization have been two of the most active reasons people trust cryptocurrencies. Other than Bitcoin, there are many more types, each with different kinds of technology and features.

The Beginning: The creation of Bitcoin
In 2008, under the pseudonym Satoshi Nakamoto, there was published a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” Bitcoin went live in 2009 as the first decentralized currency with no central control whatsoever.

First use: to purchase pizza
In 2010, Bitcoin reached the headlines when a programmer paid 10,000 Bitcoins to buy two pizzas. Those Bitcoins would be worth millions today-a famously expensive meal.

The rise of altcoins
Bitcoin’s success spawned the creation of “altcoins.” One of the more popular ones was Ethereum, bringing added features such as smart contracts that could enable decentralized applications.

Mainstream interest and speculation
By the mid-2010s, businesses and investors took on crypto. It created a boom in prices and speculation. Initial Coin Offerings exploded during this period, only to see most of them bottom out as investors scrambled to invest in new coins.

Regulation and the crypto winter
As crypto grew, so did regulations. Some countries cracked down while others embraced it. Volatile markets led to “crypto winters,” shaking out speculators but paving the way for steady growth.

Today: crypto as financial staple
It is no longer a speculation, but a digital asset solving some very real-world problems: from remittances and ownership in digital spaces, all the way to reshaping finance and challenging traditional systems in their way.