What is cryptocurrency?

1. A cryptocurrency is a digital currency created and stored electronically in blockchains.

2. It uses encryption techniques to control creation of monetary units and to verify the transfer of funds. Hence it is very secure.

3. It has no physical form and is not redeemable in another commodity like gold.

4. Its supply is not determined by any central bank or authority and the network is completely decentralised.

5. Bitcoin, Litecoin, Namecoin and PPcoin are examples of cryptocurrencies.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)