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Cryptocurrencies are the first alternative to the traditional banking system and have significant advantages that place them above previous payment methods and traditional asset classes. Imagine being money 2.0 that originates on the internet. This gives them the potential to become the fastest, easiest, cheapest, safest and most universal method of value exchange the world has ever seen.

Digital currencies offer a level playing field regardless of where you are born or where you live. If you have a smartphone or a device that can connect to the internet, you have access to cryptocurrencies just like everyone else.

Cryptocurrencies create unique opportunities to expand economic freedom for people around the world. The fact that digital currencies have virtually no borders encourages free trade, even in countries where the government exercises tight financial control over its citizens. Where inflation is a major concern, cryptocurrencies can offer an alternative to failing currencies when it comes to savings or payments.


Online exchanges such as Coinbase have made buying and selling cryptocurrencies simple, safe and profitable. It only takes a few minutes to create a secure account, and you can buy cryptocurrencies using a debit card or bank account. You have no restrictions related to quantity or choice of currency.


Experts often say that cryptocurrencies address the shortcomings of our current financial system. High fees, identity theft and extreme economic inequality are unfortunately part of the current financial system, but these are also problems that cryptocurrencies can solve. The technology behind digital currencies also has vast opportunities beyond the financial industry, from revolutionising supply chains to creating a new decentralised internet.


Although bitcoin is the first and best-known cryptocurrency, there are thousands of variations of it. Many, such as Litecoin and Bitcoin Cash, share bitcoin's core functions but explore new ways to process transactions. Others offer a wider range of features. Ethereum, for example, can be used to run applications and create contracts. However, at the heart of all four is the concept of blockchain, which is fundamental to understanding how cryptocurrencies work.


In its simplest form, a blockchain is a list of transactions that anyone can view and verify. For example, the bitcoin blockchain is a record of every instance of bitcoin being sent or received. This transaction list is fundamental to most cryptocurrencies, as it allows for secure payments between people who don't know each other, without the need for a third party, such as a bank, to verify the transaction.

Blockchain technology is interesting because it can be used for more than just cryptocurrencies. Blockchain is being used to study medical research, improve the exchange of medical records, optimise supply chains, improve online privacy and much more.


The principles behind bitcoin and the bitcoin blockchain first appeared online in a document published in late 2007 by a person or group of people named Satoshi Nakamoto. The blockchain ledger is distributed to all the computers on the network, which constantly check the accuracy of the blockchain. This means there is no safe, no organisation or central database that can be hacked, stolen or tampered with.


Cryptocurrencies use a technology called public and private key encryption to transfer ownership of the currency to a secure distributed ledger. A private key is a super-secure password that cannot be shared with anyone; it can be used to transmit values over a network. The associated public key can be freely and securely shared with others to obtain values on the network. It is impossible for anyone to learn your private key from your public key.


Most cryptocurrencies come through a decentralised computer network. However, mining doesn't just generate more bitcoins or Ethereum: it is also a mechanism that updates and protects the network by constantly checking the public ledger of the blockchain and adding new transactions. Strictly speaking, anyone with a computer with an internet connection can become a miner.

It is worth clarifying that mining is not always profitable. If you take into account the cryptocurrency you are mining, the speed of your computer and the cost of electricity in your area, you can end up spending more on the mining process than you will ever earn from cryptocurrencies That is why today mining is mainly done by specialised mining companies or large groups of people who provide their computing power.


Again, taking bitcoin as an example, the network runs a lottery in which all the mining platforms in the world compete to be the first to solve a mathematical problem that also verifies and updates the blockchain with new transactions. Each winner is rewarded with a new bitcoin, which then enters the broad market.


Like all goods and services, economic value is determined by supply and demand. Supply is the quantity available, that is, how many bitcoins can be bought at any given time. Demand is people's desire to own cryptocurrency, that is, how many people want to buy bitcoin and how much they need it. The value of cryptocurrencies is always a balance between these two factors.

There are other types of value as well. For example, there is the value derived from using cryptocurrency. Many people enjoy spending or gifting cryptocurrencies, which means they feel a sense of pride in supporting a new and exciting financial system. Similarly, some people choose to use bitcoin to buy goods because they like the low price of commissions and want to encourage businesses to accept it.


Cryptocurrencies represent a potential paradigm shift in the global financial landscape. Offering decentralisation, security and accessibility, they challenge the dominance of the traditional banking system. Despite their volatility and regulatory uncertainty, the blockchain technology underpinning them offers tremendous promise beyond finance.