The term cryptocurrency has entered the mainstream in recent years, given the popularity of its first iteration, the bitcoin.
Simply put, cryptocurrency is virtual currency that is kept secure by cryptography, the technology used to hide information.
This ensures that all users are kept anonymous and transactions are protected.
The most famous of all cryptocurrencies is the bitcoin, which was created in 2009 by a person or persons who went by the name Satoshi Nakamoto.
Cryptocurrency was designed to be a peer-to-peer currency, which means you can directly send a bitcoin to another person without having to go through a bank or a third party like Paypal.
Bitcoin, as well as other cryptocurrencies, are not maintained or backed by any banks or governments.
Instead, to ensure security and legitimacy, each transaction is recorded and verified on a public digital ledger that is stored by a large number of people.
Because the information is transparently held by more than one person, it minimises the risk of changing or falsifying the data.
With each new verified transaction, a new set of information is created for that particular bitcoin and added to the existing chain.
This technology, known as blockchain, is permanent and cannot be manipulated.