ℹ️ Skipped - page is already crawled
| Filter | Status | Condition | Details |
|---|---|---|---|
| HTTP status | PASS | download_http_code = 200 | HTTP 200 |
| Age cutoff | PASS | download_stamp > now() - 6 MONTH | 0 months ago |
| History drop | PASS | isNull(history_drop_reason) | No drop reason |
| Spam/ban | PASS | fh_dont_index != 1 AND ml_spam_score = 0 | ml_spam_score=0 |
| Canonical | PASS | meta_canonical IS NULL OR = '' OR = src_unparsed | Not set |
| Property | Value |
|---|---|
| URL | https://www.investopedia.com/cryptocurrency-4427699 |
| Last Crawled | 2026-04-11 04:17:03 (9 hours ago) |
| First Indexed | 2018-12-06 19:56:57 (7 years ago) |
| HTTP Status Code | 200 |
| Meta Title | Investing in cryptocurrency |
| Meta Description | Cryptocurrencies are digital or virtual currencies tracked on digital ledgers, and not backed by real assets. Browse Investopedia’s expert-written library to learn more. |
| Meta Canonical | null |
| Boilerpipe Text | Cryptocurrency Essentials
Cryptocurrency Investment for Beginners: Strategies and Risks
Frequently Asked Questions
Any investor can purchase cryptocurrency from popular crypto exchanges such as Coinbase, apps such as Cash App, or through brokers. Another popular way to invest in cryptocurrencies is through financial derivatives, such as CME's Bitcoin futures, or through other instruments, such as Bitcoin trusts and Bitcoin ETFs.
Bitcoin is the most well-known digital currency created in January 2009, after the concept was published in a white paper by the mysterious and pseudonymous Satoshi Nakamoto. Bitcoin and cryptocurrencies at large are touted to lower transaction fees when compared to traditional online payment methods, and unlike traditional government-issued currencies, it is operated by a decentralized authority.
Ethereum is a blockchain-based crypto platform that is best known for its digital currency called Ether, or ETH. Ethereum is second in market value only to Bitcoin, according to CoinMarketCap data. While the maximum number of bitcoins in circulation is limited at 21 million, the amount of Ether that can be created is unlimited, which is one of the main differences that investors should know.
One of the first steps to buying cryptocurrencies such as Ethereum or Bitcoin is to identify a platform for trading the digital currencies. Some of the top platforms including Coinbase, Kraken, Bitstamp, Gemini, Binance, and Bitfinex, which all offer Ethereum to buy and sell. Ether is also backed by many Fortune 500 companies, spurring investor interest.
Investors looking to add new cryptocurrencies to their portfolios often look for an
initial coin offering
(ICO), the crypto variation on an initial public offering (IPO). Like an IPO, a company seeking to raise money can create a new coin or service to launch an ICO as a way to raise funds. Investors in turn can buy the initial coin offering to own the new token, but should be aware of potential fraud within the industry, which is monitored by the SEC for potential abuse.
Investopedia / Alison Czinkota
Key Terms
Cryptocurrency ETF
A cryptocurrency exchange traded fund is an ETF that tracks a single cryptocurrency or a basket of different digital currencies, and has similar benefits to a traditional ETF—including lower cost of ownership and greater diversification. The first cryptocurrency ETF, the ProShares Bitcoin Strategy ETF, started trading in October 2021.
Blockchain
A blockchain is a distributed database that is shared and verified via a computer network. That database makes up the underlying infrastructure of cryptocurrency systems, such as Bitcoin and Ethereum, for a decentralized record of transactions.
Bitcoin mining
Bitcoin mining is the process of creating new bitcoin by using computers with specialized chips to solve complicated mathematical puzzles. The first so-called miner to solve the puzzle can earn bitcoin rewards by running such programs using systems that use massive amounts of electricity to mine the cryptocurrencies—a process that has come under criticism because the mining process is not considered environmentally friendly.
Digital currency
Digital currency is a form of currency that is also popularly known as digital money, electronic money, electronic currency, or cybercash, because they only exist in electronic form, versus a physical form such as paper cash or metal coins.
Altcoins
Altcoins generally speaking are cryptocurrencies other than Bitcoin. They share characteristics with Bitcoin but are also different in terms of how they are created and verified. According to CoinMarketCap, Bitcoin and Ether alone accounted for nearly two thirds of the total cryptocurrency market, with altcoins making up the rest.
Hot wallet
A hot wallet is a cryptocurrency storage application that is always connected to your computer and cryptocurrency network, and as such they tend to be more vulnerable to cybersecurity breaches and theft than so-called cold storage methods. Hot wallets are used to send and receive cryptocurrency, and manage tokens you possess. Hot wallets are linked with public and private keys that serve as security measures.
Decentralized Finance (DeFi)
Decentralized finance, also known as DeFi, uses new technology to remove third parties such as banks and other traditional financial institutions in financial transactions. By removing centralized control by banks and other institutions over money, financial products, and financial services, the new financial applications may lower related maintenance costs and fees charged by banks—and also increase the speed of such services.
Virtual currency
A virtual currency is a digital representation of value only available in electronic form, and is also known as
digital currency
. Such cryptocurrencies can be issued by private organizations or companies and its benefits over hard currencies include fast transaction speeds and ease of use.
What Is World Liberty Financial? What to Know About The Trump Family's Crypto Firm
Hold or Flip? How To Determine Your Best Approach to Crypto Investing
Crypto Yield Farming and Staking: How To Earn Passive Income (and the Risks)
Riding the Wave: How To Manage Crypto Volatility
Crypto Cheat Sheet: Decoding Market Cap, Volume, and Trends
Does Ethereum Have More Upside Potential Than Bitcoin?
They Know It’s Risky. They’re Doing It Anyway: Inside Gen Z’s Crypto Habit
Stablecoins: Understanding the Hidden Run Risk and Financial Stability Challenges
Retailers Are Creating Their Own Currency—Here’s What It Means for Your Wallet
Who Are the Bitcoin Twins and How Much Influence Do They Have on Crypto?
Are Stablecoins a Threat to the US Dollar Dominance? What It Means for Your Wallet
How the GENIUS Act Impacts U.S. Dollar Stablecoins
Is Crypto Bad for the Deficit? The Hidden Costs You Could End Up Paying
Crypto Investors Beware: Why 'Wrench Attacks' Are Becoming More Common and How to Stay Safe
What Does Strategy (Formerly MicroStrategy) Do and Why Does It Hold So Much Bitcoin?
Sign the Transfer or Lose a Finger: The Terrifying New World of Crypto Extortion
Crypto Scams Cost Investors Over $10 Billion in 2024: Here's How to Protect Your Investments
Coinbase Stock Jumps After Crypto Exchange Says SEC Looking To Dismiss Lawsuit
The Hidden Dangers of Buying Meme Coins You Need to Know
Crypto ETFs Are Getting Cheaper—Here's What It Means for Your 401(K)
Forget Bitcoin: The Surprising Cryptocurrency Criminals Are Turning to
Where to Buy Spot Ether ETFs in 2025
Where to Buy Spot Bitcoin ETFs in 2025
Exploring What Sets Apart Blockchain and Bitcoin ETFs
Blockchain ETF: What It Is, Example, and Risks
Secure Ways to Store Cryptocurrency: Hot, Cold, and Paper Wallets Explained
Step-by-Step Guide: Create Your Own Crypto Wallet
How to Buy SafeMoon Crypto
How to Buy Metaverse Crypto
Bitcoin Pizza Day: Celebrating the 10,000 BTC Pizza Order
XRP Explained: Cryptocurrency, Ledger, and Ripple Uses
10 Crypto Influencers To Consider Following on Social Media
NFT Investment: Pros and Cons of Non-Fungible Tokens Explained
NFTs and the Environment: What You Need to Know
Non-Fungible Token (NFT): What It Means and How It Works
Crypto Tokens vs. Cryptocurrencies vs. Crypto Commodities: What's the Difference?
Explaining the Crypto in Cryptocurrency
How Do Cryptocurrency Mining Pools Work?
What's the Environmental Impact of Cryptocurrency?
Understanding Proof-of-Stake: How PoS Transforms Cryptocurrency
Understanding HODL: How "Hold On for Dear Life" Shapes Crypto Investing
What Is Cryptocurrency Cold Storage and Which Method Is Safest?
The 5 Most Private Cryptocurrencies
Decentralized Autonomous Organization (DAO): Definition, Purpose, and Example
How To Give Cryptocurrency as a Gift
Cryptocurrency Hard Forks vs. Airdrops: What's the Difference?
Mining Pool: Definition, How It Works, Methods, and Benefits
Cryptocurrency Explained With Pros and Cons for Investment
Axie Infinity: What It Is and How It Works
Understanding Crypto Tokens: How They Function and Their Impact
Understanding Central Bank Digital Currencies (CBDCs): A Comprehensive Guide
Why Is Cryptocurrency Trading Popular in South Korea?
GPU Usage in Cryptocurrency Mining
Centralized Cryptocurrency Exchanges: How They Work and Why They Matter
What Are the Legal Risks to Cryptocurrency Investors?
Who Is Ross Ulbricht?
Digital Money: What It Is, How It Works, Types, and Examples
Understanding Cryptocurrency Futures: How They Work on Exchanges
Convertible Virtual Currency: Meaning, Types, and Example
What Are Cryptographic Hash Functions?
What Is a Cryptocurrency Public Ledger? How It Works and Risks |
| Markdown | ​
[Skip to content](https://www.investopedia.com/cryptocurrency-4427699#main)
[Investopedia](https://www.investopedia.com/)
[Trade](https://www.investopedia.com/simulator/?inv_to_sim=global_nav)
- Please fill out this field.
- [Newsletters](https://www.investopedia.com/cryptocurrency-4427699)
Please fill out this field.
- [News](https://www.investopedia.com/news-4427706)
News
- [Markets](https://www.investopedia.com/markets-news-4427704)
- [Companies](https://www.investopedia.com/company-news-4427705)
- [Earnings](https://www.investopedia.com/earnings-reports-5218419)
- [CD Rates](https://www.investopedia.com/certificates-deposit-news-7111770)
- [Mortgage Rates](https://www.investopedia.com/mortgage-rates-5184598)
- [Economy](https://www.investopedia.com/economic-news-5218422)
- [Government](https://www.investopedia.com/political-news-4689737)
- [Crypto](https://www.investopedia.com/cryptocurrency-news-5114163)
- [Live Markets News](https://www.investopedia.com/live-markets-news-11713202)
- [Personal Finance](https://www.investopedia.com/personal-finance-news-5114159)
- [View All](https://www.investopedia.com/news-4427706)
- [Investing](https://www.investopedia.com/investing-4427685)
Investing
- [Stocks](https://www.investopedia.com/stocks-4427785)
- [Cryptocurrency](https://www.investopedia.com/cryptocurrency-4427699)
- [Bonds](https://www.investopedia.com/bonds-4689778)
- [ETFs](https://www.investopedia.com/etfs-4427784)
- [Options and Derivatives](https://www.investopedia.com/options-and-derivatives-trading-4689663)
- [Commodities](https://www.investopedia.com/commodities-4427780)
- [Trading](https://www.investopedia.com/trading-4427765)
- [Automated Investing](https://www.investopedia.com/financial-technology-and-automated-investing-4689759)
- [Brokers](https://www.investopedia.com/brokers-4689772)
- [Fundamental Analysis](https://www.investopedia.com/fundamental-analysis-4689757)
- [View All](https://www.investopedia.com/investing-4427685)
- [Simulator](https://www.investopedia.com/simulator/?inv_to_sim=global_nav)
Simulator
- [Login / Portfolio](https://www.investopedia.com/simulator/portfolio)
- [Trade](https://www.investopedia.com/simulator/trade/stocks)
- [Research](https://www.investopedia.com/simulator/research)
- [My Games](https://www.investopedia.com/simulator/games/my-games)
- [Leaderboard](https://www.investopedia.com/simulator/games)
- [Banking](https://www.investopedia.com/banking-4427754)
Banking
- [Savings Accounts](https://www.investopedia.com/savings-accounts-4689728)
- [Certificates of Deposit (CDs)](https://www.investopedia.com/certificate-of-deposits-4689733)
- [Money Market Accounts](https://www.investopedia.com/money-market-account-4689730)
- [Checking Accounts](https://www.investopedia.com/checking-accounts-4689732)
- [View All](https://www.investopedia.com/banking-4427754)
- [Personal Finance](https://www.investopedia.com/personal-finance-4427760)
Personal Finance
- [Budgeting and Saving](https://www.investopedia.com/budgeting-and-savings-4427755)
- [Personal Loans](https://www.investopedia.com/personal-loans-4689729)
- [Insurance](https://www.investopedia.com/insurance-4427716)
- [Mortgages](https://www.investopedia.com/mortgage-4689703)
- [Credit and Debt](https://www.investopedia.com/credit-and-debt-4689724)
- [Student Loans](https://www.investopedia.com/student-loans-4689727)
- [Taxes](https://www.investopedia.com/taxes-4427724)
- [Credit Cards](https://www.investopedia.com/credit-card-4689721)
- [Financial Literacy](https://www.investopedia.com/financial-literacy-resource-center-7151950)
- [Retirement](https://www.investopedia.com/retirement-planning-4689695)
- [View All](https://www.investopedia.com/personal-finance-4427760)
- [Economy](https://www.investopedia.com/economy-4689801)
Economy
- [Government and Policy](https://www.investopedia.com/government-and-policy-4689793)
- [Monetary Policy](https://www.investopedia.com/monetary-policy-4689792)
- [Fiscal Policy](https://www.investopedia.com/fiscal-policy-4689796)
- [Economics](https://www.investopedia.com/economics-4689800)
- [View All](https://www.investopedia.com/economy-4689801)
- [Reviews](https://www.investopedia.com/financial-product-reviews-7110783)
Reviews
- [Best Online Brokers](https://www.investopedia.com/best-online-brokers-4587872)
- [Best Crypto Exchanges](https://www.investopedia.com/best-crypto-exchanges-5071855)
- [Best Savings Rates](https://www.investopedia.com/high-yield-savings-accounts-4770633)
- [Best CD Rates](https://www.investopedia.com/best-cd-rates-4770214)
- [Best Life Insurance](https://www.investopedia.com/the-best-life-insurance-companies-8763666)
- [Best Mortgage Rates](https://www.investopedia.com/mortgage-rates-5094943)
- [Best Robo-Advisors](https://www.investopedia.com/the-best-robo-advisors-8764849)
- [Best Personal Loans](https://www.investopedia.com/the-best-personal-loans-8761582)
- [Best Debt Relief Companies](https://www.investopedia.com/the-best-debt-relief-companies-8763179)
- [View All](https://www.investopedia.com/financial-product-reviews-7110783)
- [Newsletters](https://www.investopedia.com/cryptocurrency-4427699)
Follow Us
- [News](https://www.investopedia.com/news-4427706)
- [Markets](https://www.investopedia.com/markets-news-4427704)
- [Companies](https://www.investopedia.com/company-news-4427705)
- [Earnings](https://www.investopedia.com/earnings-reports-5218419)
- [CD Rates](https://www.investopedia.com/certificates-deposit-news-7111770)
- [Mortgage Rates](https://www.investopedia.com/mortgage-rates-5184598)
- [Economy](https://www.investopedia.com/economic-news-5218422)
- [Government](https://www.investopedia.com/political-news-4689737)
- [Crypto](https://www.investopedia.com/cryptocurrency-news-5114163)
- [Live Markets News](https://www.investopedia.com/live-markets-news-11713202)
- [Personal Finance](https://www.investopedia.com/personal-finance-news-5114159)
- [View All](https://www.investopedia.com/news-4427706)
- [Investing](https://www.investopedia.com/investing-4427685)
- [Stocks](https://www.investopedia.com/stocks-4427785)
- [Cryptocurrency](https://www.investopedia.com/cryptocurrency-4427699)
- [Bonds](https://www.investopedia.com/bonds-4689778)
- [ETFs](https://www.investopedia.com/etfs-4427784)
- [Options and Derivatives](https://www.investopedia.com/options-and-derivatives-trading-4689663)
- [Commodities](https://www.investopedia.com/commodities-4427780)
- [Trading](https://www.investopedia.com/trading-4427765)
- [Automated Investing](https://www.investopedia.com/financial-technology-and-automated-investing-4689759)
- [Brokers](https://www.investopedia.com/brokers-4689772)
- [Fundamental Analysis](https://www.investopedia.com/fundamental-analysis-4689757)
- [View All](https://www.investopedia.com/investing-4427685)
- [Simulator](https://www.investopedia.com/simulator/?inv_to_sim=global_nav)
- [Login / Portfolio](https://www.investopedia.com/simulator/portfolio)
- [Trade](https://www.investopedia.com/simulator/trade/stocks)
- [Research](https://www.investopedia.com/simulator/research)
- [My Games](https://www.investopedia.com/simulator/games/my-games)
- [Leaderboard](https://www.investopedia.com/simulator/games)
- [Banking](https://www.investopedia.com/banking-4427754)
- [Savings Accounts](https://www.investopedia.com/savings-accounts-4689728)
- [Certificates of Deposit (CDs)](https://www.investopedia.com/certificate-of-deposits-4689733)
- [Money Market Accounts](https://www.investopedia.com/money-market-account-4689730)
- [Checking Accounts](https://www.investopedia.com/checking-accounts-4689732)
- [View All](https://www.investopedia.com/banking-4427754)
- [Personal Finance](https://www.investopedia.com/personal-finance-4427760)
- [Budgeting and Saving](https://www.investopedia.com/budgeting-and-savings-4427755)
- [Personal Loans](https://www.investopedia.com/personal-loans-4689729)
- [Insurance](https://www.investopedia.com/insurance-4427716)
- [Mortgages](https://www.investopedia.com/mortgage-4689703)
- [Credit and Debt](https://www.investopedia.com/credit-and-debt-4689724)
- [Student Loans](https://www.investopedia.com/student-loans-4689727)
- [Taxes](https://www.investopedia.com/taxes-4427724)
- [Credit Cards](https://www.investopedia.com/credit-card-4689721)
- [Financial Literacy](https://www.investopedia.com/financial-literacy-resource-center-7151950)
- [Retirement](https://www.investopedia.com/retirement-planning-4689695)
- [View All](https://www.investopedia.com/personal-finance-4427760)
- [Economy](https://www.investopedia.com/economy-4689801)
- [Government and Policy](https://www.investopedia.com/government-and-policy-4689793)
- [Monetary Policy](https://www.investopedia.com/monetary-policy-4689792)
- [Fiscal Policy](https://www.investopedia.com/fiscal-policy-4689796)
- [Economics](https://www.investopedia.com/economics-4689800)
- [View All](https://www.investopedia.com/economy-4689801)
- [Reviews](https://www.investopedia.com/financial-product-reviews-7110783)
- [Best Online Brokers](https://www.investopedia.com/best-online-brokers-4587872)
- [Best Crypto Exchanges](https://www.investopedia.com/best-crypto-exchanges-5071855)
- [Best Savings Rates](https://www.investopedia.com/high-yield-savings-accounts-4770633)
- [Best CD Rates](https://www.investopedia.com/best-cd-rates-4770214)
- [Best Life Insurance](https://www.investopedia.com/the-best-life-insurance-companies-8763666)
- [Best Mortgage Rates](https://www.investopedia.com/mortgage-rates-5094943)
- [Best Robo-Advisors](https://www.investopedia.com/the-best-robo-advisors-8764849)
- [Best Personal Loans](https://www.investopedia.com/the-best-personal-loans-8761582)
- [Best Debt Relief Companies](https://www.investopedia.com/the-best-debt-relief-companies-8763179)
- [View All](https://www.investopedia.com/financial-product-reviews-7110783)
# Cryptocurrency
Cryptocurrencies such as Bitcoin are digital currencies not backed by real assets or tangible securities. They are traded between consenting parties with no broker and tracked on digital ledgers.
## Cryptocurrency Essentials
[![Manager buying cryptocurrency through mobile phone app]() :max_bytes\(150000\):strip_icc\(\)/Primary_Images-421ad583334747108aab43b54152822f.jpg) Cryptocurrency Investment for Beginners: Strategies and Risks](https://www.investopedia.com/investing-in-cryptocurrency-5215269)
[![Image of assorted crypto currencies trending higher.]() :max_bytes\(150000\):strip_icc\(\)/BestCryptoExchangesandApps-final-bc4126c95d7f45f2b285760e37625ec4.png) Best Crypto Exchanges and Apps for April 2026](https://www.investopedia.com/best-crypto-exchanges-5071855)
[![Bitcoin Halving]() :max_bytes\(150000\):strip_icc\(\)/bitcoin-halving_sourcefile-v2-5952611ae43d461a8d2414b31bfb8ca0.png) Understanding Bitcoin Halving: Impact on Price and Investment Strategies](https://www.investopedia.com/bitcoin-halving-4843769)
[![Two people discussing crypto trading while looking at computer screens]() :max_bytes\(150000\):strip_icc\(\)/INV_Crypto_FOMO_GettyImages-1308419971-f41ca43688ec4cefb8253580ef16cf13.jpg) How to Find New Cryptocurrencies for Investment](https://www.investopedia.com/news/how-find-your-next-cryptocurrency-investment/)
[![Cryptocurrency]() :max_bytes\(150000\):strip_icc\(\)/cryptocurrency-f6026a2012a14aaa9ef8a1c277fde0f7.jpg) Global Cryptocurrency Regulations: A Guide to Key Countries](https://www.investopedia.com/cryptocurrency-regulations-around-the-world-5202122)
## Frequently Asked Questions
- How do you get cryptocurrency?
Any investor can purchase cryptocurrency from popular crypto exchanges such as Coinbase, apps such as Cash App, or through brokers. Another popular way to invest in cryptocurrencies is through financial derivatives, such as CME's Bitcoin futures, or through other instruments, such as Bitcoin trusts and Bitcoin ETFs.
Learn More: [Cryptocurrency](https://www.investopedia.com/terms/c/cryptocurrency.asp)
- What is Bitcoin?
Bitcoin is the most well-known digital currency created in January 2009, after the concept was published in a white paper by the mysterious and pseudonymous Satoshi Nakamoto. Bitcoin and cryptocurrencies at large are touted to lower transaction fees when compared to traditional online payment methods, and unlike traditional government-issued currencies, it is operated by a decentralized authority.
Learn More: [What is Bitcoin?](https://www.investopedia.com/terms/b/bitcoin.asp)
- What is Ethereum?
Ethereum is a blockchain-based crypto platform that is best known for its digital currency called Ether, or ETH. Ethereum is second in market value only to Bitcoin, according to CoinMarketCap data. While the maximum number of bitcoins in circulation is limited at 21 million, the amount of Ether that can be created is unlimited, which is one of the main differences that investors should know.
Learn More: [What is Ethereum?](https://www.investopedia.com/terms/e/ethereum.asp)
- How do I buy Ethereum
One of the first steps to buying cryptocurrencies such as Ethereum or Bitcoin is to identify a platform for trading the digital currencies. Some of the top platforms including Coinbase, Kraken, Bitstamp, Gemini, Binance, and Bitfinex, which all offer Ethereum to buy and sell. Ether is also backed by many Fortune 500 companies, spurring investor interest.
Learn More: [How do I buy Ethereum](https://www.investopedia.com/news/how-do-i-buy-ethereum/)
- What is an ICO?
Investors looking to add new cryptocurrencies to their portfolios often look for an [initial coin offering](https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp) (ICO), the crypto variation on an initial public offering (IPO). Like an IPO, a company seeking to raise money can create a new coin or service to launch an ICO as a way to raise funds. Investors in turn can buy the initial coin offering to own the new token, but should be aware of potential fraud within the industry, which is monitored by the SEC for potential abuse.
Learn More: [What is an ICO?](https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp)
![Factors That Affect the Price of 1 Bitcoin]()
:max_bytes\(150000\):strip_icc\(\)/what-determines-value-1-bitcoin_final-463db4d99c8748a3870b350ff6972c55.png)
Investopedia / Alison Czinkota
### Key Terms
Cryptocurrency ETF
Blockchain
Bitcoin mining
Digital currency
Altcoins
Hot wallet
Decentralized Finance (DeFi)
Virtual currency
- Cryptocurrency ETF
A cryptocurrency exchange traded fund is an ETF that tracks a single cryptocurrency or a basket of different digital currencies, and has similar benefits to a traditional ETF—including lower cost of ownership and greater diversification. The first cryptocurrency ETF, the ProShares Bitcoin Strategy ETF, started trading in October 2021.
[Learn More](https://www.investopedia.com/investing/understanding-cryptocurrency-etfs/)
- Blockchain
A blockchain is a distributed database that is shared and verified via a computer network. That database makes up the underlying infrastructure of cryptocurrency systems, such as Bitcoin and Ethereum, for a decentralized record of transactions.
[Learn More](https://www.investopedia.com/terms/b/blockchain.asp#toc-what-is-a-blockchain)
- Bitcoin mining
Bitcoin mining is the process of creating new bitcoin by using computers with specialized chips to solve complicated mathematical puzzles. The first so-called miner to solve the puzzle can earn bitcoin rewards by running such programs using systems that use massive amounts of electricity to mine the cryptocurrencies—a process that has come under criticism because the mining process is not considered environmentally friendly.
[Learn More](https://www.investopedia.com/terms/b/bitcoin-mining.asp)
- Digital currency
Digital currency is a form of currency that is also popularly known as digital money, electronic money, electronic currency, or cybercash, because they only exist in electronic form, versus a physical form such as paper cash or metal coins.
[Learn More](https://www.investopedia.com/terms/d/digital-currency.asp)
- Altcoins
Altcoins generally speaking are cryptocurrencies other than Bitcoin. They share characteristics with Bitcoin but are also different in terms of how they are created and verified. According to CoinMarketCap, Bitcoin and Ether alone accounted for nearly two thirds of the total cryptocurrency market, with altcoins making up the rest.
[Learn More](https://www.investopedia.com/terms/a/altcoin.asp#toc-what-are-altcoins)
- Hot wallet
A hot wallet is a cryptocurrency storage application that is always connected to your computer and cryptocurrency network, and as such they tend to be more vulnerable to cybersecurity breaches and theft than so-called cold storage methods. Hot wallets are used to send and receive cryptocurrency, and manage tokens you possess. Hot wallets are linked with public and private keys that serve as security measures.
[Learn More](https://www.investopedia.com/terms/h/hot-wallet.asp)
- Decentralized Finance (DeFi)
Decentralized finance, also known as DeFi, uses new technology to remove third parties such as banks and other traditional financial institutions in financial transactions. By removing centralized control by banks and other institutions over money, financial products, and financial services, the new financial applications may lower related maintenance costs and fees charged by banks—and also increase the speed of such services.
[Learn More](https://www.investopedia.com/decentralized-finance-defi-5113835)
- Virtual currency
A virtual currency is a digital representation of value only available in electronic form, and is also known as [digital currency](https://www.investopedia.com/terms/d/digital-currency.asp). Such cryptocurrencies can be issued by private organizations or companies and its benefits over hard currencies include fast transaction speeds and ease of use.
[Learn More](https://www.investopedia.com/terms/v/virtual-currency.asp)
[![Jack Dorsey speaking at CES holding a microphone]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1079873774-10018ccf4237436db80e6012d8512be6.jpg) Jack Dorsey Sparks Debate: Could He Be the Elusive Satoshi Nakamoto?](https://www.investopedia.com/jack-dorsey-sparks-debate-11880164)
[![Bitcoin coin adorned with a Santa hat surrounded by scattered coins in a snowy atmosphere]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1354266017-296f796099904dab9dc993374592e008.jpg) How Can I Give a Wrapped Bitcoin as a Christmas?](https://www.investopedia.com/how-to-give-wrapped-bitcoin-as-a-gift-11858740)
[![People walking on a city sidewalk buildings and street signs in the background]() :max_bytes\(150000\):strip_icc\(\)/12kcrypto-0e6c52440ee8448da51a5d9207abd071.jpg) New Yorkers to Receive \$12K in Stablecoin from Coinbase Pilot](https://www.investopedia.com/people-in-this-state-are-receiving-12000-in-crypto-as-part-of-a-new-program-11858130)
[![Illustration featuring cryptocurrency icons blockchain elements and digital currency themes]() :max_bytes\(150000\):strip_icc\(\)/Crypto_final_recirc-5b6fa298d00f4ae88920e7531bf3c460.png) Investing in Crypto Made Easy](https://www.investopedia.com/investing-in-crypto-made-easy-11836463)
[![Physical representations of cryptocurrency, including one featuring the face of President Trump. ]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2260000264-d4302aace73f4036b1f16298e25f8b45.jpg) What Is World Liberty Financial? What to Know About The Trump Family's Crypto Firm](https://www.investopedia.com/world-liberty-financial-is-the-trump-family-s-crown-crypto-jewel-11900339)
### Explore Cryptocurrency
[All](https://www.investopedia.com/cryptocurrency-4427699) [Altcoins](https://www.investopedia.com/cryptocurrency-4427699) [Bitcoin](https://www.investopedia.com/cryptocurrency-4427699) [Strategy & Education](https://www.investopedia.com/cryptocurrency-4427699) [Buying & Selling](https://www.investopedia.com/cryptocurrency-4427699)
More
[Initial Coin Offerings](https://www.investopedia.com/cryptocurrency-4427699) [Blockchain](https://www.investopedia.com/cryptocurrency-4427699)
[![A man and a woman looking at a smartphone together while standing in a kitchen]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2209603040-6d496bf748a049e096c1313cbe2324b2.jpg) Hold or Flip? How To Determine Your Best Approach to Crypto Investing](https://www.investopedia.com/hold-or-flip-how-to-determine-your-best-approach-to-crypto-investing-11831947)
[![A man standing on a rooftop terrace looking at his smartphone]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1443667703-9933fa3d93944ef2b9a1c9712c19340d.jpg) Crypto Yield Farming and Staking: How To Earn Passive Income (and the Risks)](https://www.investopedia.com/crypto-yield-farming-and-staking-how-to-earn-passive-income-and-the-risks-11834581)
[![A man seated at a desk working on a laptop lit by a lamp]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2200189179-8456d1da21044105af0e7b60e45e2bf5.jpg) Riding the Wave: How To Manage Crypto Volatility](https://www.investopedia.com/riding-the-wave-how-to-manage-crypto-volatility-11833947)
[![Person at a desk working on a keyboard with a laptop and a monitor displaying stock charts]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1774415211-700502095b6743b7bb286aba0f4009aa.jpg) Crypto Cheat Sheet: Decoding Market Cap, Volume, and Trends](https://www.investopedia.com/crypto-cheat-sheet-decoding-market-cap-volume-and-trends-11833687)
[![A neon sign advertises a Bitcoin and Ethereum crypto currency exchange in Warsaw, Poland, on Jan. 4, 2025.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2191923711-de63d5576849466bbd1c7ebae2fa65b7.jpg) Does Ethereum Have More Upside Potential Than Bitcoin?](https://www.investopedia.com/ethereum-or-bitcoin-11832006)
[![A person seated at a desk holding a device and participating in a video conference on a large monitor]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2178583002-74f163ae039640f7b0f21a26a9bf1c56.jpg) They Know It’s Risky. They’re Doing It Anyway: Inside Gen Z’s Crypto Habit](https://www.investopedia.com/they-know-it-s-risky-they-re-doing-it-anyway-inside-gen-z-s-crypto-habit-11799218)
[![A hand held palm up with the phrase 'stable coin' displayed above it, a cityscape in the background]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2208141152-1a924199284f4a3386dc6d27b4059e8f.jpg) Stablecoins: Understanding the Hidden Run Risk and Financial Stability Challenges](https://www.investopedia.com/hidden-risks-of-widespread-adoption-of-stablecoin-11747043)
[![A grocery store display featuring a sign for low prices and Triscuit crackers]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-72007921-8581752c139b487f9c4e408cc1504e7f.jpg) Retailers Are Creating Their Own Currency—Here’s What It Means for Your Wallet](https://www.investopedia.com/retailers-currency-and-your-shopping-11765663)
[![On March 7, 2025, Cameron Winklevoss and Tyler Winklevoss, co-founders of Gemini Trust Co listen as U.S. President Donald Trump speaks during The White House Digital Assets Summit in the State Dining Room of the White House on March 07, 2025 in Washington, DC. Trump held the summit to hear from crypto leaders on how his administration has invested in digital assets.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2203869362-be3291efee354c668f03b662107c0f17.jpg) Who Are the Bitcoin Twins and How Much Influence Do They Have on Crypto?](https://www.investopedia.com/who-are-the-bitcoin-twins-11761116)
[![Illustration of coins and text defining stablecoin as a cryptocurrency pegged to a currency commodity or financial instrument]() :max_bytes\(150000\):strip_icc\(\)/terms_s_stablecoin_FINAL-89e1671b1f24486b84b74cebe6836573.jpg) Are Stablecoins a Threat to the US Dollar Dominance? What It Means for Your Wallet](https://www.investopedia.com/stablecoins-and-us-dollar-dominance-11772153)
[![A persons hand with a digital graphic labeled Stable Coin hovering above it symbolizing digital currency]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2197822022-29f80e0e3480411a98e014f0dcedff27.jpg) How the GENIUS Act Impacts U.S. Dollar Stablecoins](https://www.investopedia.com/the-genius-act-impact-on-stablecoins-11765112)
[![A pile of Bitcoin themed coins.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2185343010-cf10c7a2365647d0ab584d83323b8c46.jpg) Is Crypto Bad for the Deficit? The Hidden Costs You Could End Up Paying](https://www.investopedia.com/crypto-effect-on-national-deficit-11759794)
[![A person holding a smartphone displaying a Bitcoin logo and stock market graphics]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-13697660231-e8685fc2858d4569a85d9adcd02d4fca.jpg) Crypto Investors Beware: Why 'Wrench Attacks' Are Becoming More Common and How to Stay Safe](https://www.investopedia.com/wrench-attacks-and-crypto-investors-11759639)
[![MicroStrategy's Michael Saylor speaks at the Bitcoin 2021 Convention]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1321733343-4b6bf3be43224734b94c3f32aaeaaa88.jpg) What Does Strategy (Formerly MicroStrategy) Do and Why Does It Hold So Much Bitcoin?](https://www.investopedia.com/what-does-strategy-formerly-microstrategy-do-11750239)
[![Attorney Sanford Talkin speaks as William Duplessie, who faces charges in connection with the alleged torture of Italian crypto millionaire Michael Valentino Teofrasto Carturan, attends his hearing at Manhattan Criminal Court in New York City on May 30, 2025.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2217084965-ff0dd31c44f644e194cdecd64c9dc861.jpg) Sign the Transfer or Lose a Finger: The Terrifying New World of Crypto Extortion](https://www.investopedia.com/the-terrifying-new-world-of-crypto-extortion-11742685)
[![A representation of a hooded hacker working in a red-lit computer room.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2159296370-b1defb20eaed4cfb93f7de555f09f96b.jpg) Crypto Scams Cost Investors Over \$10 Billion in 2024: Here's How to Protect Your Investments](https://www.investopedia.com/crypto-scams-and-how-to-protect-your-investments-11690163)
[![The Coinbase Global logo seen on a mobile device. ]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2167943647-0ef4346bbf49494c996b1b996aeac76b.jpg) Coinbase Stock Jumps After Crypto Exchange Says SEC Looking To Dismiss Lawsuit](https://www.investopedia.com/coinbase-stock-jumps-after-crypto-exchange-says-sec-looking-to-dismiss-lawsuit-11683963)
[![The Melania Meme coin price chart is displayed on a mobile phone with the official Melania meme website in this photo illustration]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-2194470831-3c1ef00f16dd4511beb1fb7dc3c59559.jpg) The Hidden Dangers of Buying Meme Coins You Need to Know](https://www.investopedia.com/top-risks-of-buying-meme-coins-8782157)
[![Chief Investment Officer of ETF and Index Investments at Blackrock rings the opening bell as Bitcoin Spot ETFs are launched on the Nasdaq Exchange on Jan. 11, 2024 in New York City. ]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1917736185-bd5482f8e514472ab5e1a196ad06f04e.jpg) Crypto ETFs Are Getting Cheaper—Here's What It Means for Your 401(K)](https://www.investopedia.com/crypto-etfs-are-getting-cheaper-8774912)
[![Persons hands holding a mobile phone displaying a chart. A laptop is also open]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1324174054-06cb02729f8b49c093bd31353e1853ad.jpg) Forget Bitcoin: The Surprising Cryptocurrency Criminals Are Turning to](https://www.investopedia.com/the-cryptocurrency-criminals-are-turning-to-8771622)
[![Business man trading the new spot Ethereum ETF]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1296463085-b60e0424f48645bb8e13a1484d0a8e3e.jpg) Where to Buy Spot Ether ETFs in 2025](https://www.investopedia.com/where-to-buy-the-new-spot-ether-etfs-8685955)
[![Man looking at market data on a smartphone and laptop at home]() :max_bytes\(150000\):strip_icc\(\)/INV_ForeignCurrencyCD_GettyImages-1318116974-1a9f04add11441c1b2c54b4a85ddf947.jpg) Where to Buy Spot Bitcoin ETFs in 2025](https://www.investopedia.com/where-to-buy-the-new-spot-bitcoin-etfs-8557203)
[![Woman looking at a screen]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1404386473-de6726516218420c9928eb8b785d6fd4.jpg) Exploring What Sets Apart Blockchain and Bitcoin ETFs](https://www.investopedia.com/news/what-difference-between-blockchain-etfs-and-bitcoin-etfs/)
[![Handshake; human hand and robot hand]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1182799016-1a9a918addf44fd891306aca3fb35d05.jpg) Blockchain ETF: What It Is, Example, and Risks](https://www.investopedia.com/tech/how-blockchain-etfs-work/)
[![A digital hardware wallet for storing bitcoin]() :max_bytes\(150000\):strip_icc\(\)/Primary-Image-how-to-store-cryptocurrency-in-2023-7500942-d7e5d02e6aca4a009d312eedca8b0ac9.jpg) Secure Ways to Store Cryptocurrency: Hot, Cold, and Paper Wallets Explained](https://www.investopedia.com/how-to-store-cryptocurrency-7500942)
[![Young asian male trading and currency trading app on his smartphone ]() :max_bytes\(150000\):strip_icc\(\)/Primary-Image-how-to-create-a-crypto-wallet-in-2023-7500574-3124ef4a5e634c33ab65724a686bc98a.jpg) Step-by-Step Guide: Create Your Own Crypto Wallet](https://www.investopedia.com/how-to-create-a-crypto-wallet-7500574)
[![Cryptocurrency Large Investor Holding Coin Asset]() :max_bytes\(150000\):strip_icc\(\)/Primary-Image-how-to-buy-safemoon-crypto-7367861-b8430761ded34118be8c234aede2e057.jpg) How to Buy SafeMoon Crypto](https://www.investopedia.com/how-to-buy-safemoon-crypto-7367861)
[![Two men trying out virtual reality headset in an office]() :max_bytes\(150000\):strip_icc\(\)/INV_MoneyintheMetaverse_GettyImages-1437209398-817885e9e1d44439855520ace1bb3869.jpg) How to Buy Metaverse Crypto](https://www.investopedia.com/how-to-buy-metaverse-crypto-7113440)
[![Handing over a bitcoin for a pizza]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1136443401-c24dfa78eda74cd0b7dd0acc5da84877.jpg) Bitcoin Pizza Day: Celebrating the 10,000 BTC Pizza Order](https://www.investopedia.com/news/bitcoin-pizza-day-celebrating-20-million-pizza-order/)
[![Crypto on mobile phone]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1322813129-ecaa3ff515a64716b02512207a0a892e.jpg) XRP Explained: Cryptocurrency, Ledger, and Ripple Uses](https://www.investopedia.com/what-is-xrp-6362550)
[![An illustration of Ethereum co-founder Vitaly Dmitrievich Buterin.]() :max_bytes\(150000\):strip_icc\(\)/INV-Structured-Content-Vitalik-Buterin-1-FINAL-1-2-60927be237bd4f459ae96d35fb57c0f3.png) 10 Crypto Influencers To Consider Following on Social Media](https://www.investopedia.com/crypto-influencers-you-should-follow-5224141)
[![NFT artist painting on a digital tablet in home office]() :max_bytes\(150000\):strip_icc\(\)/NFTartistpaintingonadigitaltabletinhishomeoffice-08e9f820f4124d27b71080dfed70fe44.jpg) NFT Investment: Pros and Cons of Non-Fungible Tokens Explained](https://www.investopedia.com/pros-and-cons-of-investing-in-nfts-5220290)
[![Drought and climate change impact]() :max_bytes\(150000\):strip_icc\(\)/drought-and-climate-change-impact-1180604487-cdb02091daba4ac9a449242450e68017.jpg) NFTs and the Environment: What You Need to Know](https://www.investopedia.com/nfts-and-the-environment-5220221)
[![ Non-Fungible Token (NFT) definition: a cryptographic asset on a blockchain with unique identification codes and metadata that distinguish them for each other.]() :max_bytes\(150000\):strip_icc\(\)/NFT_final-f26864e1a32e4e0d8161f28132cdde64.png) Non-Fungible Token (NFT): What It Means and How It Works](https://www.investopedia.com/non-fungible-tokens-nft-5115211)
[![]() :max_bytes\(150000\):strip_icc\(\)/shutterstock_677490325-5bfc3132c9e77c0026b60806.jpg) Crypto Tokens vs. Cryptocurrencies vs. Crypto Commodities: What's the Difference?](https://www.investopedia.com/tech/crypto-primer-currencies-commodities-tokens/)
[![Digital room with padlock and word blockchain.]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-748345923-8be7972bb1fc4e06a0218edaea7d8abd.jpg) Explaining the Crypto in Cryptocurrency](https://www.investopedia.com/tech/explaining-crypto-cryptocurrency/)
[![GPU mining farm]() :max_bytes\(150000\):strip_icc\(\)/bitcoin_mining_shutterstock_772693789-5bfc321e46e0fb00511ae12c.jpg) How Do Cryptocurrency Mining Pools Work?](https://www.investopedia.com/tech/how-do-mining-pools-work/)
[![Bitcoins, illustration]() :max_bytes\(150000\):strip_icc\(\)/bitcoins--illustration-932730210-5008483229044ceca8c394fb9a191dab.jpg) What's the Environmental Impact of Cryptocurrency?](https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/)
[![Proof of Stake]() :max_bytes\(150000\):strip_icc\(\)/Term-Definitions_Proof_Of_Stake_V1-2fe2af764d9c404e8c387224e4f69f60.jpg) Understanding Proof-of-Stake: How PoS Transforms Cryptocurrency](https://www.investopedia.com/terms/p/proof-stake-pos.asp)
[![HODL]() :max_bytes\(150000\):strip_icc\(\)/terms_h_hodl_FINAL_-617cf51c77b64b7e8122d84dcc5b9a6f.jpg) Understanding HODL: How "Hold On for Dear Life" Shapes Crypto Investing](https://www.investopedia.com/terms/h/hodl.asp)
[![Bitcoin cash and Bitcoin gold]() :max_bytes\(150000\):strip_icc\(\)/BitcoinGoldandBitcoincash-5aa83d1dc064710037b1a3ff.jpg) What Is Cryptocurrency Cold Storage and Which Method Is Safest?](https://www.investopedia.com/articles/investing/030515/what-cold-storage-bitcoin.asp)
[![Black woman holding a coffee cup and reading on her phone]() :max_bytes\(150000\):strip_icc\(\)/DelmaineDonson-e29b1cb7936941d381cea41b3cdf10fe.jpg) The 5 Most Private Cryptocurrencies](https://www.investopedia.com/tech/five-most-private-cryptocurrencies/)
[![People hands raised in the air, vote, election, democracy]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1314869305-6e0b87c0f0e54f73b786cc4afbfe15be.jpg) Decentralized Autonomous Organization (DAO): Definition, Purpose, and Example](https://www.investopedia.com/tech/what-dao/)
[![A woman seated on a wooden bench holding a coffee cup and looking at her smartphone]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1609110306-1c172e2c65864111a8f974fece5a009b.jpg) How To Give Cryptocurrency as a Gift](https://www.investopedia.com/how-to-give-cryptocurrency-as-a-gift-5205409)
[![Cryptocurrency Large Investor Holding Coin Asset]() :max_bytes\(150000\):strip_icc\(\)/Primary-Image-how-to-buy-safemoon-crypto-7367861-b8430761ded34118be8c234aede2e057.jpg) Cryptocurrency Hard Forks vs. Airdrops: What's the Difference?](https://www.investopedia.com/tech/cryptocurrency-forks-vs-airdrops-whats-difference/)
[![Data center]() :max_bytes\(150000\):strip_icc\(\)/mining-5bfc323746e0fb00517d2697.jpg) Mining Pool: Definition, How It Works, Methods, and Benefits](https://www.investopedia.com/terms/m/mining-pool.asp)
[![Cryptocurrency]() :max_bytes\(150000\):strip_icc\(\)/TermDefinitions_crypto_final-3419a789d2be4564b3369b1d4ba742e1.png) Cryptocurrency Explained With Pros and Cons for Investment](https://www.investopedia.com/terms/c/cryptocurrency.asp)
[![Group of friends playing mobile games on smartphone]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-958126562-5becb59046e0fb002659390d.jpg) Axie Infinity: What It Is and How It Works](https://www.investopedia.com/what-is-axie-infinity-5220657)
[![Crypto Token]() :max_bytes\(150000\):strip_icc\(\)/crypto-token.asp-v5-6774f213bd3b4deaac537f196990edff.png) Understanding Crypto Tokens: How They Function and Their Impact](https://www.investopedia.com/terms/c/crypto-token.asp)
[![Central Bank Digital Currency]() :max_bytes\(150000\):strip_icc\(\)/terms_c_central-bank-digital-currency-cbdc_FINAL-671aefb2905b407583007d63fa46e49d.jpg) Understanding Central Bank Digital Currencies (CBDCs): A Comprehensive Guide](https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp)
[![Seoul skyline at night]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1138347692-41eb390d9b92467bb80d2e17ba11fea0.jpg) Why Is Cryptocurrency Trading Popular in South Korea?](https://www.investopedia.com/news/why-cryptocurrency-trading-popular-south-korea-0/)
[![A collection of physical representations of cryptocurrencies like Bitcoin, Ripple, Ethereum, and Litecoin.]() :max_bytes\(150000\):strip_icc\(\)/currency3077532_1280-5bfc324b46e0fb0051bf17aa.jpg) GPU Usage in Cryptocurrency Mining](https://www.investopedia.com/tech/gpu-cryptocurrency-mining/)
[![]() :max_bytes\(150000\):strip_icc\(\)/bitcoin_crypto-5bfc31afc9e77c005180eb8a.jpeg) Centralized Cryptocurrency Exchanges: How They Work and Why They Matter](https://www.investopedia.com/tech/what-are-centralized-cryptocurrency-exchanges/)
[![Young forex trader listening to the news while trading on laptop and also taking notes into trading journal. ]() :max_bytes\(150000\):strip_icc\(\)/10WaystoAvoidLosingMoneyinForex-5859ce1754ff4faa9c213048a4bad1ce.jpg) What Are the Legal Risks to Cryptocurrency Investors?](https://www.investopedia.com/tech/what-are-legal-risks-cryptocurrency-investors/)
[![Ross Ulbricht]() :max_bytes\(150000\):strip_icc\(\)/ross-ulbricht-dark-net-pirate1-fe814082ceb34d84b7943c77b51c1697.png) Who Is Ross Ulbricht?](https://www.investopedia.com/tech/ross-ulbricht-dark-net-pirate/)
[![Digital Money]() :max_bytes\(150000\):strip_icc\(\)/digital-money.asp-FINAL-1-aaced1b1be734fbab6076d924e8fafd8.png) Digital Money: What It Is, How It Works, Types, and Examples](https://www.investopedia.com/terms/d/digital-money.asp)
[![A close-up, 3D, multilayered bitcoin sign standing on a golden cube]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1080264986-306eaea7794f40479d804298cf0d8457.jpg) Understanding Cryptocurrency Futures: How They Work on Exchanges](https://www.investopedia.com/articles/investing/012215/how-invest-bitcoin-exchange-futures.asp)
[![A representation of a Bitcoin appears on a U.S. dollar bill. ]() :max_bytes\(150000\):strip_icc\(\)/GettyImages-1827522420-a475acef445e4bd687fc3b03aa03260e.jpg) Convertible Virtual Currency: Meaning, Types, and Example](https://www.investopedia.com/terms/c/convertible-virtual-currency.asp)
[![Cryptographic Hash Functions]() :max_bytes\(150000\):strip_icc\(\)/cryptographic-hash-functions-final-edf41ae1d0164df3aaee536acb527613.png) What Are Cryptographic Hash Functions?](https://www.investopedia.com/news/cryptographic-hash-functions/)
[![]() :max_bytes\(150000\):strip_icc\(\)/shutterstock_703031830-5bfc3102c9e77c0058780ceb.jpg) What Is a Cryptocurrency Public Ledger? How It Works and Risks](https://www.investopedia.com/tech/what-cryptocurrency-public-ledger/)
[Investopedia](https://www.investopedia.com/)
[Newsletter Sign Up](https://www.investopedia.com/cryptocurrency-4427699)
Follow Us
- [News](https://www.investopedia.com/news-4427706)
- [Investing](https://www.investopedia.com/investing-4427685)
- [Simulator](https://www.investopedia.com/simulator/?inv_to_sim=global_nav)
- [Banking](https://www.investopedia.com/banking-4427754)
- [Personal Finance](https://www.investopedia.com/personal-finance-4427760)
- [Economy](https://www.investopedia.com/economy-4689801)
- [Reviews](https://www.investopedia.com/financial-product-reviews-7110783)
- [Dictionary](https://www.investopedia.com/financial-term-dictionary-4769738)
- [About Us](https://www.investopedia.com/about-us-5093223)
- [Editorial Process](https://www.investopedia.com/legal-4768893#toc-editorial-policy)
- [Careers](https://www.people.inc/careers)
- [Contact Us](https://support.investopedia.com/contactus)
- [Privacy Policy](https://www.people.inc/brands-privacy)
- [Terms of Service](https://www.people.inc/brands-termsofservice)
- [Advertise](https://www.people.inc/advertising)
- [\#](https://www.investopedia.com/terms-beginning-with-num-4769350)
- [A](https://www.investopedia.com/terms-beginning-with-a-4769351)
- [B](https://www.investopedia.com/terms-beginning-with-b-4769352)
- [C](https://www.investopedia.com/terms-beginning-with-c-4769353)
- [D](https://www.investopedia.com/terms-beginning-with-d-4769354)
- [E](https://www.investopedia.com/terms-beginning-with-e-4769355)
- [F](https://www.investopedia.com/terms-beginning-with-f-4769356)
- [G](https://www.investopedia.com/terms-beginning-with-g-4769357)
- [H](https://www.investopedia.com/terms-beginning-with-h-4769358)
- [I](https://www.investopedia.com/terms-beginning-with-i-4769359)
- [J](https://www.investopedia.com/terms-beginning-with-j-4769360)
- [K](https://www.investopedia.com/terms-beginning-with-k-4769361)
- [L](https://www.investopedia.com/terms-beginning-with-l-4769362)
- [M](https://www.investopedia.com/terms-beginning-with-m-4769363)
- [N](https://www.investopedia.com/terms-beginning-with-n-4769364)
- [O](https://www.investopedia.com/terms-beginning-with-o-4769365)
- [P](https://www.investopedia.com/terms-beginning-with-p-4769366)
- [Q](https://www.investopedia.com/terms-beginning-with-q-4769367)
- [R](https://www.investopedia.com/terms-beginning-with-r-4769368)
- [S](https://www.investopedia.com/terms-beginning-with-s-4769369)
- [T](https://www.investopedia.com/terms-beginning-with-t-4769370)
- [U](https://www.investopedia.com/terms-beginning-with-u-4769371)
- [V](https://www.investopedia.com/terms-beginning-with-v-4769372)
- [W](https://www.investopedia.com/terms-beginning-with-w-4769373)
- [X](https://www.investopedia.com/terms-beginning-with-x-4769374)
- [Y](https://www.investopedia.com/terms-beginning-with-y-4769375)
- [Z](https://www.investopedia.com/terms-beginning-with-z-4769376)
Investopedia is part of the [People Inc.](https://www.people.inc/) publishing family.
Newsletter Sign Up
Newsletter Sign Up |
| Readable Markdown | ## Cryptocurrency Essentials
[Cryptocurrency Investment for Beginners: Strategies and Risks](https://www.investopedia.com/investing-in-cryptocurrency-5215269)
## Frequently Asked Questions
- Any investor can purchase cryptocurrency from popular crypto exchanges such as Coinbase, apps such as Cash App, or through brokers. Another popular way to invest in cryptocurrencies is through financial derivatives, such as CME's Bitcoin futures, or through other instruments, such as Bitcoin trusts and Bitcoin ETFs.
- Bitcoin is the most well-known digital currency created in January 2009, after the concept was published in a white paper by the mysterious and pseudonymous Satoshi Nakamoto. Bitcoin and cryptocurrencies at large are touted to lower transaction fees when compared to traditional online payment methods, and unlike traditional government-issued currencies, it is operated by a decentralized authority.
- Ethereum is a blockchain-based crypto platform that is best known for its digital currency called Ether, or ETH. Ethereum is second in market value only to Bitcoin, according to CoinMarketCap data. While the maximum number of bitcoins in circulation is limited at 21 million, the amount of Ether that can be created is unlimited, which is one of the main differences that investors should know.
- One of the first steps to buying cryptocurrencies such as Ethereum or Bitcoin is to identify a platform for trading the digital currencies. Some of the top platforms including Coinbase, Kraken, Bitstamp, Gemini, Binance, and Bitfinex, which all offer Ethereum to buy and sell. Ether is also backed by many Fortune 500 companies, spurring investor interest.
- Investors looking to add new cryptocurrencies to their portfolios often look for an [initial coin offering](https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp) (ICO), the crypto variation on an initial public offering (IPO). Like an IPO, a company seeking to raise money can create a new coin or service to launch an ICO as a way to raise funds. Investors in turn can buy the initial coin offering to own the new token, but should be aware of potential fraud within the industry, which is monitored by the SEC for potential abuse.
Investopedia / Alison Czinkota
### Key Terms
- Cryptocurrency ETF
A cryptocurrency exchange traded fund is an ETF that tracks a single cryptocurrency or a basket of different digital currencies, and has similar benefits to a traditional ETF—including lower cost of ownership and greater diversification. The first cryptocurrency ETF, the ProShares Bitcoin Strategy ETF, started trading in October 2021.
- Blockchain
A blockchain is a distributed database that is shared and verified via a computer network. That database makes up the underlying infrastructure of cryptocurrency systems, such as Bitcoin and Ethereum, for a decentralized record of transactions.
- Bitcoin mining
Bitcoin mining is the process of creating new bitcoin by using computers with specialized chips to solve complicated mathematical puzzles. The first so-called miner to solve the puzzle can earn bitcoin rewards by running such programs using systems that use massive amounts of electricity to mine the cryptocurrencies—a process that has come under criticism because the mining process is not considered environmentally friendly.
- Digital currency
Digital currency is a form of currency that is also popularly known as digital money, electronic money, electronic currency, or cybercash, because they only exist in electronic form, versus a physical form such as paper cash or metal coins.
- Altcoins
Altcoins generally speaking are cryptocurrencies other than Bitcoin. They share characteristics with Bitcoin but are also different in terms of how they are created and verified. According to CoinMarketCap, Bitcoin and Ether alone accounted for nearly two thirds of the total cryptocurrency market, with altcoins making up the rest.
- Hot wallet
A hot wallet is a cryptocurrency storage application that is always connected to your computer and cryptocurrency network, and as such they tend to be more vulnerable to cybersecurity breaches and theft than so-called cold storage methods. Hot wallets are used to send and receive cryptocurrency, and manage tokens you possess. Hot wallets are linked with public and private keys that serve as security measures.
- Decentralized Finance (DeFi)
Decentralized finance, also known as DeFi, uses new technology to remove third parties such as banks and other traditional financial institutions in financial transactions. By removing centralized control by banks and other institutions over money, financial products, and financial services, the new financial applications may lower related maintenance costs and fees charged by banks—and also increase the speed of such services.
- Virtual currency
A virtual currency is a digital representation of value only available in electronic form, and is also known as [digital currency](https://www.investopedia.com/terms/d/digital-currency.asp). Such cryptocurrencies can be issued by private organizations or companies and its benefits over hard currencies include fast transaction speeds and ease of use.
[What Is World Liberty Financial? What to Know About The Trump Family's Crypto Firm](https://www.investopedia.com/world-liberty-financial-is-the-trump-family-s-crown-crypto-jewel-11900339)
[Hold or Flip? How To Determine Your Best Approach to Crypto Investing](https://www.investopedia.com/hold-or-flip-how-to-determine-your-best-approach-to-crypto-investing-11831947)
[Crypto Yield Farming and Staking: How To Earn Passive Income (and the Risks)](https://www.investopedia.com/crypto-yield-farming-and-staking-how-to-earn-passive-income-and-the-risks-11834581)
[Riding the Wave: How To Manage Crypto Volatility](https://www.investopedia.com/riding-the-wave-how-to-manage-crypto-volatility-11833947)
[Crypto Cheat Sheet: Decoding Market Cap, Volume, and Trends](https://www.investopedia.com/crypto-cheat-sheet-decoding-market-cap-volume-and-trends-11833687)
[Does Ethereum Have More Upside Potential Than Bitcoin?](https://www.investopedia.com/ethereum-or-bitcoin-11832006)
[They Know It’s Risky. They’re Doing It Anyway: Inside Gen Z’s Crypto Habit](https://www.investopedia.com/they-know-it-s-risky-they-re-doing-it-anyway-inside-gen-z-s-crypto-habit-11799218)
[Stablecoins: Understanding the Hidden Run Risk and Financial Stability Challenges](https://www.investopedia.com/hidden-risks-of-widespread-adoption-of-stablecoin-11747043)
[Retailers Are Creating Their Own Currency—Here’s What It Means for Your Wallet](https://www.investopedia.com/retailers-currency-and-your-shopping-11765663)
[Who Are the Bitcoin Twins and How Much Influence Do They Have on Crypto?](https://www.investopedia.com/who-are-the-bitcoin-twins-11761116)
[Are Stablecoins a Threat to the US Dollar Dominance? What It Means for Your Wallet](https://www.investopedia.com/stablecoins-and-us-dollar-dominance-11772153)
[How the GENIUS Act Impacts U.S. Dollar Stablecoins](https://www.investopedia.com/the-genius-act-impact-on-stablecoins-11765112)
[Is Crypto Bad for the Deficit? The Hidden Costs You Could End Up Paying](https://www.investopedia.com/crypto-effect-on-national-deficit-11759794)
[Crypto Investors Beware: Why 'Wrench Attacks' Are Becoming More Common and How to Stay Safe](https://www.investopedia.com/wrench-attacks-and-crypto-investors-11759639)
[What Does Strategy (Formerly MicroStrategy) Do and Why Does It Hold So Much Bitcoin?](https://www.investopedia.com/what-does-strategy-formerly-microstrategy-do-11750239)
[Sign the Transfer or Lose a Finger: The Terrifying New World of Crypto Extortion](https://www.investopedia.com/the-terrifying-new-world-of-crypto-extortion-11742685)
[Crypto Scams Cost Investors Over \$10 Billion in 2024: Here's How to Protect Your Investments](https://www.investopedia.com/crypto-scams-and-how-to-protect-your-investments-11690163)
[Coinbase Stock Jumps After Crypto Exchange Says SEC Looking To Dismiss Lawsuit](https://www.investopedia.com/coinbase-stock-jumps-after-crypto-exchange-says-sec-looking-to-dismiss-lawsuit-11683963)
[The Hidden Dangers of Buying Meme Coins You Need to Know](https://www.investopedia.com/top-risks-of-buying-meme-coins-8782157)
[Crypto ETFs Are Getting Cheaper—Here's What It Means for Your 401(K)](https://www.investopedia.com/crypto-etfs-are-getting-cheaper-8774912)
[Forget Bitcoin: The Surprising Cryptocurrency Criminals Are Turning to](https://www.investopedia.com/the-cryptocurrency-criminals-are-turning-to-8771622)
[Where to Buy Spot Ether ETFs in 2025](https://www.investopedia.com/where-to-buy-the-new-spot-ether-etfs-8685955)
[Where to Buy Spot Bitcoin ETFs in 2025](https://www.investopedia.com/where-to-buy-the-new-spot-bitcoin-etfs-8557203)
[Exploring What Sets Apart Blockchain and Bitcoin ETFs](https://www.investopedia.com/news/what-difference-between-blockchain-etfs-and-bitcoin-etfs/)
[Blockchain ETF: What It Is, Example, and Risks](https://www.investopedia.com/tech/how-blockchain-etfs-work/)
[Secure Ways to Store Cryptocurrency: Hot, Cold, and Paper Wallets Explained](https://www.investopedia.com/how-to-store-cryptocurrency-7500942)
[Step-by-Step Guide: Create Your Own Crypto Wallet](https://www.investopedia.com/how-to-create-a-crypto-wallet-7500574)
[How to Buy SafeMoon Crypto](https://www.investopedia.com/how-to-buy-safemoon-crypto-7367861)
[How to Buy Metaverse Crypto](https://www.investopedia.com/how-to-buy-metaverse-crypto-7113440)
[Bitcoin Pizza Day: Celebrating the 10,000 BTC Pizza Order](https://www.investopedia.com/news/bitcoin-pizza-day-celebrating-20-million-pizza-order/)
[XRP Explained: Cryptocurrency, Ledger, and Ripple Uses](https://www.investopedia.com/what-is-xrp-6362550)
[10 Crypto Influencers To Consider Following on Social Media](https://www.investopedia.com/crypto-influencers-you-should-follow-5224141)
[NFT Investment: Pros and Cons of Non-Fungible Tokens Explained](https://www.investopedia.com/pros-and-cons-of-investing-in-nfts-5220290)
[NFTs and the Environment: What You Need to Know](https://www.investopedia.com/nfts-and-the-environment-5220221)
[Non-Fungible Token (NFT): What It Means and How It Works](https://www.investopedia.com/non-fungible-tokens-nft-5115211)
[Crypto Tokens vs. Cryptocurrencies vs. Crypto Commodities: What's the Difference?](https://www.investopedia.com/tech/crypto-primer-currencies-commodities-tokens/)
[Explaining the Crypto in Cryptocurrency](https://www.investopedia.com/tech/explaining-crypto-cryptocurrency/)
[How Do Cryptocurrency Mining Pools Work?](https://www.investopedia.com/tech/how-do-mining-pools-work/)
[What's the Environmental Impact of Cryptocurrency?](https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/)
[Understanding Proof-of-Stake: How PoS Transforms Cryptocurrency](https://www.investopedia.com/terms/p/proof-stake-pos.asp)
[Understanding HODL: How "Hold On for Dear Life" Shapes Crypto Investing](https://www.investopedia.com/terms/h/hodl.asp)
[What Is Cryptocurrency Cold Storage and Which Method Is Safest?](https://www.investopedia.com/articles/investing/030515/what-cold-storage-bitcoin.asp)
[The 5 Most Private Cryptocurrencies](https://www.investopedia.com/tech/five-most-private-cryptocurrencies/)
[Decentralized Autonomous Organization (DAO): Definition, Purpose, and Example](https://www.investopedia.com/tech/what-dao/)
[How To Give Cryptocurrency as a Gift](https://www.investopedia.com/how-to-give-cryptocurrency-as-a-gift-5205409)
[Cryptocurrency Hard Forks vs. Airdrops: What's the Difference?](https://www.investopedia.com/tech/cryptocurrency-forks-vs-airdrops-whats-difference/)
[Mining Pool: Definition, How It Works, Methods, and Benefits](https://www.investopedia.com/terms/m/mining-pool.asp)
[Cryptocurrency Explained With Pros and Cons for Investment](https://www.investopedia.com/terms/c/cryptocurrency.asp)
[Axie Infinity: What It Is and How It Works](https://www.investopedia.com/what-is-axie-infinity-5220657)
[Understanding Crypto Tokens: How They Function and Their Impact](https://www.investopedia.com/terms/c/crypto-token.asp)
[Understanding Central Bank Digital Currencies (CBDCs): A Comprehensive Guide](https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp)
[Why Is Cryptocurrency Trading Popular in South Korea?](https://www.investopedia.com/news/why-cryptocurrency-trading-popular-south-korea-0/)
[GPU Usage in Cryptocurrency Mining](https://www.investopedia.com/tech/gpu-cryptocurrency-mining/)
[Centralized Cryptocurrency Exchanges: How They Work and Why They Matter](https://www.investopedia.com/tech/what-are-centralized-cryptocurrency-exchanges/)
[What Are the Legal Risks to Cryptocurrency Investors?](https://www.investopedia.com/tech/what-are-legal-risks-cryptocurrency-investors/)
[Who Is Ross Ulbricht?](https://www.investopedia.com/tech/ross-ulbricht-dark-net-pirate/)
[Digital Money: What It Is, How It Works, Types, and Examples](https://www.investopedia.com/terms/d/digital-money.asp)
[Understanding Cryptocurrency Futures: How They Work on Exchanges](https://www.investopedia.com/articles/investing/012215/how-invest-bitcoin-exchange-futures.asp)
[Convertible Virtual Currency: Meaning, Types, and Example](https://www.investopedia.com/terms/c/convertible-virtual-currency.asp)
[What Are Cryptographic Hash Functions?](https://www.investopedia.com/news/cryptographic-hash-functions/)
[What Is a Cryptocurrency Public Ledger? How It Works and Risks](https://www.investopedia.com/tech/what-cryptocurrency-public-ledger/) |
| Shard | 148 (laksa) |
| Root Hash | 7273739457760125548 |
| Unparsed URL | com,investopedia!www,/cryptocurrency-4427699 s443 |