How does cryptocurrency work?

With the objective of providing a plain introduction to cryptocurrencies, we proceed with understanding how cryptocurrencies work based on their ‘original’ purpose, namely that of facilitating digital transactions.



The idea of ‘facilitating digital transactions’ may still seem somewhat unclear, so let’s be more specific: through cryptocurrencies, people are able to hand over value between each other in a direct way, comparable to a cash transaction.

Through the last years within the crypto and blockchain space, the nature of ‘cryptocurrency’ has become increasingly complex. Some coins exist as utility tokens, and others as security tokens, with numerous definitions existing for both.