🔵What Is Cryptocurrency? – Introduction to Digital Assets

The first cryptocurrency in history, Bitcoin, was introduced in 2009 by an individual or group under the pseudonym Satoshi Nakamoto. It was created with the aim of eliminating intermediaries in global financial transactions. Since then, over 25,000 cryptocurrencies have emerged in global markets.

By 2024, the total market capitalization of digital assets surpassed $2 trillion. Countries like El Salvador, the UAE, and Switzerland have officially recognized Bitcoin. Meanwhile, millions of Iranian users actively buy and sell these assets on domestic and international exchanges. This article provides a detailed overview of the technical foundations, practical uses, advantages, risks, and the mechanism behind cryptocurrencies.

🔵What Exactly Is Cryptocurrency?

A cryptocurrency is a purely digital financial asset that is created, stored, and transferred electronically. Unlike traditional fiat currencies such as US Dollar, cryptocurrencies have no physical backing (e.g., gold or oil) and are not issued by any central bank or government.

Their value is based on user trust, supply and demand, and decentralized cryptographic algorithms. The core infrastructure of digital assets is blockchain technology, which ensures transaction security, transparency, and immutability.

🔵Difference Between Cryptocurrency, Token, and Crypto

• Cryptocurrency: An independent digital asset with its own blockchain, secured by advanced cryptography. Examples include Bitcoin and Litecoin.
• Token: A digital asset built on top of an existing blockchain, without its own blockchain. For instance, Tether (USDT) can be issued on Ethereum (ERC-20) or TRON (TRC-20). Tokens are often used for payments, service access, or fundraising (ICO).
• Crypto: A general, informal term used to describe all cryptographically secured digital assets, including cryptocurrencies, tokens, NFTs, and more.

🔵How Does Cryptocurrency Work?

🔵What Is Blockchain?

Blockchain is a distributed, immutable database that stores digital transaction information in chained blocks. Each block contains transaction data, a timestamp, and a cryptographic hash of the previous block, ensuring security and data integrity.

One of blockchain’s key features is decentralization—data is stored across thousands of nodes worldwide, making it resistant to tampering and eliminating the need for intermediaries.

🔵How Are Transactions Verified?

Blockchain networks use consensus mechanisms to validate transactions. Two common methods include:

• Proof of Work (PoW): Miners solve complex mathematical problems to validate transactions and earn rewards. This method offers high security but consumes significant energy (e.g., Bitcoin).
• Proof of Stake (PoS): Validators are chosen based on the amount of cryptocurrency they stake. This method is faster and more energy-efficient (e.g., Cardano, Ethereum 2.0).

Both mechanisms aim to prevent fraud, double-spending, and maintain network integrity.

🔵What Is a Crypto Wallet?

A crypto wallet is a software or hardware tool that stores users’ private and public keys, allowing them to send, receive, and manage their digital assets. Wallet types include:

• Hot Wallet: Connected to the internet, easy to use, but more vulnerable to hacking (e.g., Trust Wallet, MetaMask).
• Cold Wallet: Offline storage with higher security, ideal for long-term holders (e.g., Ledger, Trezor, paper wallets).

Ownership in crypto is tied to the private key—losing this key means losing access to the funds.

🔵Practical Applications of Cryptocurrency

• Fast, low-cost international money transfers
• Inflation hedge and value preservation
• High-growth investment potential
• Online payments for goods and services
• Use in smart contracts, NFTs, blockchain games, and DeFi platforms

🔵How Is Cryptocurrency Created?

Creating cryptocurrency typically follows two main paths: launching an independent cryptocurrency with its own blockchain, or issuing a token on an existing blockchain. Each method requires technical knowledge, a defined use case, and often initial capital.

1. Mining (PoW Networks)

Mining involves using specialized hardware (e.g., ASICs) to solve mathematical problems and validate transactions, earning new coins as rewards. It is primarily used in Proof of Work systems like Bitcoin.

2. Token Creation on Existing Blockchains

The simplest way to launch a crypto asset is by creating a token through smart contracts on platforms such as Ethereum (ERC-20), TRON (TRC-20), or Binance Smart Chain (BEP-20). This method is cost-effective and doesn’t require building a new blockchain.

3. Initial Offerings (ICO / IEO / IDO)

Initial offerings help blockchain startups raise funds by selling tokens before the platform’s official launch.

🔵Pros and Cons of Using Cryptocurrency

Advantages:

• High transaction speed
• Enhanced transparency and security
• Independence from banking systems
• Global accessibility

Disadvantages:

• High price volatility
• Technical complexity for beginners
• Risk of fraud and hacking
• Unclear regulations in some countries

🔵Legal Status of Cryptocurrency Worldwide

Cryptocurrency regulations vary significantly across countries. While some have legalized and regulated digital assets, others have imposed restrictions or outright bans.

In developed nations, cryptocurrencies are often taxed as digital assets, and exchanges/wallets operate under financial authorities. Global bodies like FATF are also developing standards to combat money laundering and illicit financing in crypto.

🔵Conclusion

As of 2025, over 420 million people globally own digital assets, and this number is expected to exceed 1 billion by the end of the decade. With a market cap surpassing $2 trillion, financial giants like BlackRock, Fidelity, and JPMorgan have entered the crypto space.

Digital assets are transforming payment systems and introducing new paradigms in digital ownership, value storage, smart contracts, and decentralization. Blockchain technology, the foundation of this transformation, is paving the way for a transparent and intermediary-free economy.

While opportunities abound, entering this space without knowledge can lead to losses. Beginners should learn the fundamentals, follow credible news sources, use secure wallets, and choose reliable exchanges.

If you’re interested in cryptocurrencies, our experts can provide you with the right guidance to access the best trading conditions.

Fortuna Markets Support

🔵Frequently Asked Questions (FAQ)

1. How can I buy cryptocurrency?To purchase cryptocurrency, sign up on a reputable exchange (local or international), complete KYC verification, and use a bank card or Tether transfer to buy your desired asset, then move it to your personal wallet.
2. Can cryptocurrency be hacked? Large blockchains like Bitcoin and Ethereum are nearly impossible to hack. However, wallets and exchanges can be vulnerable if not secured. Using a hardware wallet and enabling two-factor authentication is strongly recommended.
3. Is holding cryptocurrency taxable? In many countries, yes. Cryptocurrencies are considered taxable assets, especially when sold at a profit. Users should review their country’s tax regulations before investing.