What is cryptocurrency?
Cryptocurrency refers to digital money that operates on a decentralized platform. It is also known as virtual or digital currency and uses cryptography to ensure security and allow for the transfer of digital information. It is in most cases designed for anonymous use since no personal information is required to use it.
Cryptocurrency is comparable to regular currency (fiat currency) in that it serves as a medium of exchange. But that could be as far as the similarities go. Unlike fiat currency, it is not controlled by any governing authority. This makes it impossible for governments and central banks to manipulate it or in any other way interfere with its operations.
A majority of virtual currencies have a specific market cap. This prevents the problem of inflation that is common to fiat money whereby more currency is printed as the need arises. The first cryptocurrency, Bitcoin, is still the most popular and holds the highest market price.