Cryptocurrency is virtual currency, and bears a unique code. These are coins created by solving mathematical puzzles using computer power. This process is called mining. They are stored in wallets which are digital directories accessed through passwords. These coins could be broken into smaller units, say a hundredth-millionth of a coin.

Cryptos are not controlled by a central authority. They are crowd-controlled through an electronic ledger called blockchain. A proposed transaction is verified through it. When majority of blockchain viewers agree, coin no. xxx can be transferred from Wallet X to Wallet Y. The transaction is cleared, and a new entry is made in blockchain.

Most cryptocurrencies are not pegged to any asset. Stable-coins may be linked to either the US dollar or a basket of currencies.

Cryptos are used in transactions, but not usually. They are used in foreign trade, gaming and online casinos. As they are hard to trace by the authorities, they are used in shady deals.

Cryptocurrencies are traded in multiple currencies on many platforms. Cryptos are extremely volatile. Their transactions are slow — before a transaction is vetted, many people have to see it. It is, therefore, hard to use cryptos for common transactions.

Cryptocurrencies are not suitable for traditional banking. In traditional banking, cash credit or bank money is created. It is not possible to create cash credit with cryptos. Each coin has a unique code and lending means transferring the coin with that unique code. Bank money is just a notional entry.

Each coin’s history is recorded from its mining stage to its various transactions in blockchain. Every proposed transaction must be confirmed by the majority viewing it. After its acceptance by the majority, it is entered in a blockchain.