Cryptocurrency is a type of digital or virtual currency that uses cryptography for security and operates on decentralized networks, typically through blockchain technology. Unlike traditional fiat currencies (such as the US Dollar, Euro, or Yen), which are issued and regulated by central banks and governments, cryptocurrencies are not controlled by any central authority. This decentralization allows for peer-to-peer transactions without the need for intermediaries like banks.

One key difference is that fiat currencies have physical forms (cash and coins) and their value is largely influenced by government policies, inflation, and economic factors. In contrast, cryptocurrencies exist only in digital form and derive value from factors such as supply and demand, investor sentiment, and technological adoption.

Additionally, cryptocurrency transactions are often faster, borderless, and more transparent due to blockchain’s public ledger, whereas fiat transactions may involve delays, fees, and oversight by financial institutions.

A cryptocurrency is a digital, decentralized form of money secured by cryptographic techniques. It exists entirely online and is typically built on blockchain technology, which serves as a transparent and immutable ledger for recording all transactions. Unlike traditional fiat currencies, which are issued and controlled by national governments and central banks, cryptocurrencies operate without a central authority.

The primary difference is in trust and governance: fiat money relies on trust in the government and banking system, while cryptocurrency trust is placed in code, algorithms, and decentralized networks. Fiat currencies have no intrinsic supply limit and can be manipulated through monetary policy, whereas many cryptocurrencies, like Bitcoin, have a fixed supply.

Additionally, cryptocurrency enables borderless, permissionless transactions that can bypass traditional financial systems. However, fiat currencies remain more widely accepted for everyday use, while cryptocurrencies are still emerging in mainstream commerce despite their technological advantages.