Cryptocurrencies: An Introduction to Digital Assets

Cryptocurrencies have become one of the most talked-about topics for many reasons: from their rapid price increases to their integration into traditional financial systems. However, only a small percentage of people truly understand the fundamentals of these digital assets. So, what makes cryptocurrencies so unique and valuable?
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If you're looking to understand this concept, you’re in the right place. Our course is designed to help readers grasp the basic principles of cryptocurrencies and blockchain enabling them to make informed decisions.

In this lesson, you will learn:

• What cryptocurrencies are
• Key features of cryptocurrencies
• The main cryptocurrencies in the market

What Are Cryptocurrencies?

Simply put, cryptocurrency is a virtual digital asset that uses specialized technology to store and record transaction data. These assets are also known as tokens.
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You may be wondering why they are called cryptocurrencies. The answer is simple: they are secured by cryptographic techniques that prevent double-spending, ensuring that the same token cannot be spent more than once.
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Another crucial feature of cryptocurrencies is their decentralized nature. They operate on blockchain technology – a distributed ledger system.
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Unlike traditional money, cryptocurrencies are not controlled by banks or government institutions. They function independently, without a central governing body.
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Cryptocurrency transactions are conducted through a peer-to-peer network, allowing buyers and sellers to exchange assets directly without intermediaries. Transactions are confirmed by specific network participants, such as miners in Proof-of-Work (PoW) systems or validators in Proof-of-Stake (PoS) systems, before being recorded on the blockchain.
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Nodes play a crucial role in maintaining security and decentralization in blockchain networks. A node is any computer that connects to the blockchain network, but not all nodes perform the same functions. Full nodes store a complete copy of the blockchain and verify transactions, helping enforce the network’s rules. Light nodes rely on full nodes for transaction verification, downloading only necessary data. Mining nodes (in PoW systems) and validator nodes (in PoS systems) actively confirm transactions and add new blocks to the blockchain. The Bitcoin blockchain, for example, is maintained by a decentralized network of full nodes and miners who work together to secure and verify transactions.

While you cannot physically hold cryptocurrencies, they still hold real value and can be stored in digital wallets or cryptocurrency exchanges. They can be used as a form of payment for goods and services, similar to traditional money. However, cryptocurrencies are more than just a payment method. They are also considered investment assets, similar to stocks, gold, and commodities.

Key Features of Cryptocurrencies

• Decentralized – Control is not held by a single entity but is distributed among network participants.
• Peer-to-Peer – Transactions can be conducted directly between users without intermediaries.
• Secure – Cryptographic techniques ensure transaction security.
• Immutable – Transactions recorded on the blockchain cannot be deleted or altered.
• Permissionless – Since digital currencies are not controlled by a central authority, anyone can transact or view transactions on the ledger.
• Limited Supply – Many cryptocurrencies have a fixed supply. For example, Bitcoin has a maximum supply of 21 million coins.
• Transparent – Every transaction on the blockchain is visible to all network participants.
• Financially Inclusive – Cryptocurrency networks are global and accessible to anyone with an internet connection, enabling financial inclusion for the unbanked.

Leading Cryptocurrencies

Many newcomers have heard of Bitcoin and Ethereum, but the crypto market consists of thousands of crypto assets. However, it is important to note that the top ten cryptocurrencies account for nearly 90% of the total crypto market capitalization.
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Bitcoin is the world’s first decentralized cryptocurrency and the earliest significant use case of blockchain technology.

The project was created by an anonymous developer (or group of developers) under the pseudonym Satoshi Nakamoto with the goal of enabling a decentralized digital payment system. As of March 2025, Bitcoin remains the most valuable crypto asset in a market of over 37 million crypto tokens. If we compare the crypto market to an ocean, Bitcoin is the dominant shark, taking up more than a half of the entire ecosystem.
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Altcoins refer to all cryptocurrencies that emerged after Bitcoin.
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In our upcoming lessons, we will explore Bitcoin’s fundamentals in detail and take a closer look at altcoins. Now that we have covered the basics of cryptocurrencies, you should have a clearer understanding of why they represent such a revolutionary financial innovation.

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