--- title: Cryptocurrency url: "https://www.unknowngravity.com/en/glosario/criptomoneda" site: Unknown Gravity published: "2025-06-07T15:01:42+00:00" modified: "2026-10-15T21:18:40+00:00" language: en description: A digital currency that uses cryptography to secure transactions and govern new units. Learn how cryptocurrencies work and how they differ. section: "Home > Glossary > Cryptocurrency" --- # Cryptocurrency GLOSSARY · BLOCKCHAIN & WEB3 What a cryptocurrency is: digital money secured by cryptography and a blockchain, how it is issued and transferred, and how it differs from tokens. Reviewed on October 15, 2026 A cryptocurrency is a decentralized digital asset designed to work as a 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. ## What is a cryptocurrency? A **cryptocurrency** is a **decentralized digital asset** designed to work as a **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: - Is **recorded 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 to **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 fees** to execute transactions or smart contracts (as with ETH on Ethereum). - **Collateral in DeFi protocols** for loans, yield farming, stablecoins, etc. Representative examples: - **[Bitcoin](/en/glosario/bitcoin) (BTC)**: first cryptocurrency, focused on value and decentralization. - **Ethereum (ETH)**: programmable platform, used as gas and as 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: - **Native** (e.g. BTC, ETH): they are part of their blockchain's protocol. - **Tokenized** (e.g. ERC-20, BEP-20): issued on another blockchain network. More on this in [how to create a cryptocurrency](/en/articulos/crear-tu-propia-criptomoneda-blockchain). 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, their mass adoption has led to regulatory frameworks such as **MiCA in Europe** or country-specific tax regulations. Learn more: [What Is Blockchain and How Does It Work? Types, Real Examples and Limits](/en/articulos/que-es-blockchain-y-como-funciona) ## Explained simply 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 **verifies and records transactions** using automatic rules. ## Cryptocurrency: 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 are carried out through decentralized networks - It can have functional, speculative or technological use depending on the context ## Cryptocurrency: 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** ## Cryptocurrency: 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 [What Is Blockchain and How Does It Work? Types, Real Examples and Limits](/en/articulos/que-es-blockchain-y-como-funciona) [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) 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 services](/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 in each country’s official gazette (for Spain and the EU, [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu)).