What Is Cryptocurrency? A Complete Guide to Crypto and Digital Currencies

Cryptocurrency, or crypto, is a digital currency designed to work as a medium of exchange for purchasing goods and services.

By Adam Levy – Updated Sep 4, 2025 at 3:23 PM | Fact-checked by Parker Hicks

Key Points

Cryptocurrency relies on blockchain to verify transactions without central banks.
Thousands of cryptocurrencies exist, evolving constantly with new applications.
Investing in cryptocurrency could produce high returns but comes with volatility risks.

Most people have heard of cryptocurrency by now, but some still don't truly understand it. More than just a form of digital cash, cryptocurrency and the underlying technology have the potential to alter the future of the financial sector and many other industries. So let's learn exactly what cryptocurrency is.

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A rendering of a crypto coin with a lock on it. — Image source: Getty Images.

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Best Cryptocurrency Apps and Exchanges for ##MONTH## ##YEAR##

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Artist rendering of blockchain. — Image source: Getty Images.

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Data source: CoinMarketCap as of Aug. 15, 2024.
Rank	Coin Name	Market Cap
1	Bitcoin (CRYPTO:BTC)	$2.19 trillion
2	Ethereum (CRYPTO:ETH)	$520.55 billion
3	Tether (CRYPTO:USDT)	$168.35 billion
4	XRP(CRYPTO:XRP)	$166.81 billion
5	Binance Coin (CRYPTO:BNB)	$117.45 billion

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A rendering of a coin with a lock on it. — Image source: Getty Images.

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Investing in Cryptocurrency in 2025

These technologies serve as the gateway between the digital blockchain and human society.

How Is Cryptocurrency Taxed? (2025 IRS Rules)

This guide will explain everything you need to know about taxes on crypto trading and income.

Is Cryptocurrency a Good Investment?

Read our expert Q&A about what you should know before investing in crypto.

What Is the Next Cryptocurrency to Explode in 2025?

We don't know for certain, but we have a line on eight possibilities.

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About the Author

Adam Levy is a contributing Motley Fool stock market analyst covering technology, consumer, and financial stocks and how policy, economic, and consumer trends shape personal finance, Social Security and retirement savings. Before The Motley Fool, Adam was a financial advisor at Edward Jones. He studied finance and electrical engineering at Carnegie Mellon University.

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Adam Levy has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.