Cryptocurrency?

A ‘cryptocurrency’ is a digital currency, an online alternative to the pound in your pocket. Unlike the pound, cryptocurrencies have nothing to do with the Bank of England or the government. As such, they are extremely volatile.

Bitcoin, created in 2009, was the first cryptocurrency. Many more have followed. There are now more than a thousand, from Ethereum to Dogecoin – originally issued as a joke currency, it now has a market capitalisation of around £215 million – and Trumpcoin, created to support President Trump

The Oldie in his vision of ‘making America great again’.

Thomas Carper, the senior US Senator for Delaware, has said of the phenomenon, ‘Virtual currencies, perhaps most notably bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.’

There’s a clue to that confusion in the name. ‘Crypto’ comes from the Greek kruptos, which means ‘hidden’.

How does this e-currency system work? Bitcoin, like many cryptocurrencies, is dependent on the blockchain network. Blockchain is a digital computer file, in which transactions made in bitcoin (or another cryptocurrency) are recorded. It was developed in 2008 by Satoshi Nakamoto – a pseudonym for the person (or, possibly, persons) who designed bitcoin – as a ‘peer-to-peer’ electronic cash system; not dissimilar to Paypal but, unlike Paypal, ownerless.

Crypotcurrency is supposedly quicker, cheaper and more reliable than traditional currencies. But how can it