What defines cryptocurrency?

Cryptocurrency is defined as a digital or virtual currency that utilizes cryptography for security. This characteristic of being secured by cryptographic techniques is essential because it ensures the integrity and security of transactions, preventing fraud and making it difficult to counterfeit. The decentralized nature of cryptocurrencies, which often operate on blockchain technology, further enhances their security and resilience against traditional currency manipulations.

Unlike tangible currencies that can be physically held, cryptocurrencies exist only in digital form and are used for various transactions online. They are not government-issued, meaning they are not tied to a central banking authority, which distinguishes them from traditional fiat currencies. The use of cryptography also means that these currencies can provide a higher level of privacy and anonymity during transactions, appealing to users who value these aspects. Overall, the definition encapsulates the core attributes that set cryptocurrencies apart from traditional forms of money.