--- title: Cryptocurrency url: "https://www.unknowngravity.com/en/glosario/criptomoneda" site: Unknown Gravity published: "2025-06-07T15:01:42+00:00" modified: "2026-07-30T15:43:02+00:00" language: en-US description: A cryptocurrency is a decentralized digital asset designed to work as medium of exchange, store of value or unit of account through the use of blockchain technology and advanced cryptography. section: "Home > Cryptocurrency" --- # Cryptocurrency GLOSSARY · BLOCKCHAIN & WEB3 Digital currency that uses cryptography to secure transactions and control the creation of new units. WHAT IS IT? · FOR DUMMIES A **cryptocurrency** is a type of **digital money that only exists on the internet**. You can use it to buy, sell or send money to another person without the need for banks, cards or intermediaries. Everything works thanks to a computer network that **verify and record transactions** using automatic rules. WHAT IS IT? · PRO A **cryptocurrency** is a **decentralized digital asset** designed to work as **medium of exchange, store of value or unit of account** through the use of **blockchain technology** and **advanced cryptography**. Unlike traditional fiat money, it is not issued or controlled by central banks, but is managed through **distributed protocols** and **consensus between nodes** on a public or private network. Cryptocurrencies work on blockchain, where each transaction: - If **Record publicly** and immutably. - It is **verified by the network** using consensus algorithms such as **Proof of Work (PoW)** or **Proof of Stake (PoS)**. - It's cryptographically protected for **ensure authenticity, integrity and relative anonymity**. Its main functions include: - **Means of payment** on platforms, stores or transfers between people. - **Speculative or investment asset** on centralized (CEX) and decentralized (DEX) exchanges. - **Gas or commission** to execute transactions or smart contracts (as with ETH on Ethereum). - **Collateral in DeFi protocols** for loans, yield farming, stablecoins, etc. Representative examples: - **Bitcoin (BTC)**: first cryptocurrency, focused on value and decentralization. - **Ethereum (ETH)**: programmable platform for use as a gas and a base asset in DeFi. - **Stablecoins (USDT, DAI, USDC)**: designed to maintain parity with fiat currencies. - **Altcoins**: tokens from specific projects such as MATIC, AVAX, ADA, DOT, and many others. Cryptocurrencies can be classified as: - **Natives** (e.g. BTC, ETH): they are part of your blockchain protocol. - **Tokenized** (e.g. ERC-20, BEP-20): issued on another blockchain network. From a legal perspective, their treatment varies by jurisdiction and use: they may be considered **financial assets, means of payment, commodities or digital representations**. In addition, its mass adoption has led to regulatory frameworks such as **MiCA in Europe** or country-specific tax regulations. ## 01 / Key points - It is digital money protected by cryptography and registered on blockchain - It does not depend on banks or governments to function - It is transferred between users using private and public keys - Its issuance and validation is carried out through decentralized networks - It can have functional, speculative or technological use depending on the context ## 02 / Advantages - **Immediate global transfers without intermediaries** - **High security and resistance to counterfeiting** - **24/7 availability, with no geographical restrictions** - **Diversity of uses: payments, investment, DeFi, NFTs, DAOs** - **Financial access for unbanked or excluded people** ## 03 / Disadvantages - **High volatility** in most cryptocurrencies - **Risk of loss if the wallet or private key is not well protected** - **Fraudulent or speculative use in certain cases** - **Lack of regulation or over-regulation depending on the country** - **Requires technical knowledge to operate safely** RELATED CONCEPTS [Token](/en/glosario/token) [Wallet](/en/glosario/wallet) [Blockchain](/en/glosario/blockchain) [Fungible Token](/en/glosario/token-fungible) [ERC-20](/en/glosario/erc-20) [Exchange (Cryptocurrency Exchange)](/en/glosario/exchange-intercambio-de-criptomonedas) [Proof of Stake (PoS)](/en/glosario/proof-of-stake-pos) [Proof of Work (PoW)](/en/glosario/proof-of-work-pow) KEEP LEARNING [Bitcoin vs Ethereum: what are the differences between these cryptocurrencies?](/en/articulos/bitcoin-vs-ethereum) [Gold-based cryptocurrencies: How they work and which ones exist](/en/articulos/criptomonedas-oro-funcionamiento-tipos) [How cryptocurrency mining works and its environmental impact](/en/articulos/como-funciona-la-mineria-de-criptomonedas) [Exploring the most popular blockchain-based cryptocurrencies.](/en/articulos/explorando-las-criptomonedas-mas-populares-basadas-en-blockchain) [Understanding Crypto Market Cycles](/en/articulos/comprendiendo-los-ciclos-del-mercado-cripto) RELATED SERVICES [Cryptocurrency development](/en/servicios/desarrollo-de-criptomonedas) [Token issuance](/en/servicios/emision-de-tokens) [Development of smart contracts](/en/servicios/company-development-smart-contracts) [Web3 Development](/en/servicios/desarrollo-web3) [Crypto Payment Gateway](/en/servicios/pasarela-de-pagos-crypto) [Full glossary](/en/glosario) This entry is informative. It is not legal, tax or investment advice. The rules cited change: check the current version on [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu).