Have you ever heard of Bitcoin? Probably. But do you really know what cryptocurrency is and why the whole world is talking about digital money? If not, you’re in the right place.
Cryptocurrency – money without a bank
Imagine a world where you can send money to someone without intermediaries, without waiting, and without high fees. That’s exactly how cryptocurrencies work. They are digital assets – money that exists only on the internet. They have no physical form like banknotes or coins, but you can use them to pay, trade, and invest.
The key difference? You don’t need a bank. Transactions happen directly between people in a system called peer-to-peer (P2P), meaning person to person. No intermediaries mean less bureaucracy, lower costs, and more freedom. You can send money across the world in just a few minutes – often for just a few cents.
Bitcoin – how it all started
Bitcoin (BTC) was the first and most important cryptocurrency, created in 2009 by the mysterious Satoshi Nakamoto. This was also the moment when blockchain technology was introduced – a system that records all transactions in a public, unchangeable ledger.
Bitcoin was designed as a response to the financial crisis – an alternative system where banks and governments don’t control your money. That’s why many people call it digital gold – its limited supply (only 21 million coins will ever exist) makes it potentially more valuable over time as demand increases.
What else besides Bitcoin? The world of altcoins
While Bitcoin was the first, today there are thousands of other cryptocurrencies. Each one has its own purpose and technology. Any cryptocurrency other than Bitcoin is called an altcoin (alternative coin).
Here are some of the most popular altcoins:
- Ethereum (ETH) – the second most popular cryptocurrency, allowing developers to create smart contracts and decentralized applications.
- BNB (Binance Coin) – a token linked to Binance, the world’s largest cryptocurrency exchange.
- Cardano (ADA) – a cryptocurrency that focuses on scientific research and blockchain innovation.
- Solana (SOL) – known for its fast and cheap transactions.
- Polkadot (DOT) – a project that enables different blockchains to communicate with each other.
Some cryptocurrencies, like Tether (USDT) and USD Coin (USDC), are called stablecoins – they maintain a stable value by being pegged to a traditional currency, like the US dollar.
Are cryptocurrencies legal?
It depends on the country. In most places (like Poland, the US, and Europe), you can freely buy, sell, and use cryptocurrencies. However, some countries, like China, have banned them.
Interestingly, El Salvador was the first country in the world to recognize Bitcoin as an official currency in 2021, alongside the US dollar.
Why were cryptocurrencies created?
Cryptocurrencies serve many purposes, but their main advantages are:
- Privacy – you don’t need to provide personal details like with a bank.
- No intermediaries – transfers without banks, PayPal, or other institutions.
- Security – thanks to blockchain technology, cryptocurrencies cannot be counterfeited.
- Global access – you can send money anywhere in the world without restrictions.
However, it’s important to remember that cryptocurrencies also come with risks – their prices can rise quickly, but they can also drop just as fast. In the next lessons, you’ll learn how to invest safely and avoid pitfalls.
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