Let’s start with the best known of all cryptocurrencies, the famous ‘Bitcoin’. Bitcoin is the best known all digital cryptocurrencies and is often featured on the news, often showing how investors turned a few quid into tens of thousands of pounds.

It’s a bit of a mystery where it originated from. It’s story was that it was invented by an anonymous person or group called Satoshi Nakamoto, in 2008. Since then, like the Stock Market, hundreds of other Cryptocurrencies have been created. 

Cryptocurrencies are not physical objects. Instead, they exist in the ‘virtual world’ as snippets of computer code. Sometimes you see cryptocurrencies like Bitcoin as a large gold coin emblazoned with a letter ‘B’ on them, but these are only for show.

Cryptocurrencies have no central point of control, unlike currencies such as pounds, dollars etc which are controlled and managed (often poorly) by the Government and controlled banks. They are known as “decentralised currencies”, which means they are not regulated by financial authorities. Cryptocurrencies are controlled by the people for people, and this often makes Governments upset as it’s hard to track and trace people’s wealth in digital forms.

Instead of banks, Cryptocurrency users visit ‘exchanges’ mostly websites like eToro to buy or sell their coins and transform them into their local currency (or a different one). Cryptocurrency is kept in digital wallets for safety, similar as you’d do with cash. These wallets can either be in a hard-form, like a USB stick, specially designed to hold Cryptocurrency or a virtual wallet.

Cryptocurrencies are created every day through a process called ‘Mining’. These involve super computers that work hard to solve complicated equations, and each correct answer produces a Cryptocurrency like Bitcoin. Miners get paid for their work as ‘auditors’ and are seen as guardians of the currency, usually in Crypto. They verify cryptocurrency transactions and this is to keep users honest.