A is digital money without a bank in the middle. Who sends how much to whom is recorded in a : a chain of blocks that many computers keep and check at the same time. Each block carries the of the one before. Anyone who changes an old entry has to recalculate this and all later fingerprints – and their copy then no longer matches the others.
What a coin is – and what it is not
A coin is an entry in this shared ledger, not a share in a company. Behind Bitcoin, the first cryptocurrency, there is no company with revenue; the price comes from supply and demand alone. Many other coins belong to projects with their own team. tie their price to a currency such as the US dollar – this only holds as long as the backing is sufficient and investors trust it.
Who checks the entries
New transfers are bundled into a block. Before it is added to the chain, many computers check whether the sender has the coins and has signed with their . Who may add a block is decided by the network: with Bitcoin through computing work (proof of work), with others through deposited coins (proof of stake). Within the chain itself there is nobody who can reverse a transfer.
Why recalculating is not enough
In the exercise, recalculating takes an instant. With Bitcoin it costs so much computing work that you practically cannot catch up with the other computers. So a majority of copies cannot simply be forced through.
Rules and oversight
No state backs a cryptocurrency. In the EU, under , rules have applied to stablecoins since mid-2024 and to providers such as crypto exchanges since the end of 2024 – they do not protect against price losses. Rules can change: bans or new requirements in large countries have moved prices sharply in the past. For cryptos, our Elliott rule calculates on .