The “crypto” in cryptocurrencies refers to the cryptographic techniques that allow for the creation and processing of digital currencies. Alongside this important crypto feature is a common commitment to remaining decentralized; cryptocurrencies are typically developed by teams that build in mechanisms for issuance and other controls. This section of the FinTech guide briefly covers cryptocurrency (like “Bitcoin”) and blockchain technology (a protocol for a peer-to-peer electronic cash system). TRON’s native token, TRX, is used to pay for on-chain transactions and as a payment method on exchanges. Anyone holding TRX can apply to become a Super Representative, with the authority and obligation to validate transactions and create new blocks for the blockchain. As of Dec. 24, 2025, its market cap was over $21 billion, and one DOGE was valued at around $0.13, making it the eighth-largest cryptocurrency.

Decentralised applications

The table below shows how the cryptocurrencies IG offers compare. Further down we explain how these factors may influence the cryptocurrencies’ valuations, and why they matter to traders. Bitcoin is currently in high demand because of the returns it has created in the past. It is difficult to say which crypto will boom next because so many projects are being developed, and market sentiments swing wildly.

For example, it can be used to securely store important records, such as medical histories and land deeds. Cryptocurrencies could also eventually present challenges for central banks were they to affect control over the money supply and therefore the conduct of monetary policy. Despite the hype, cryptocurrencies still don’t fulfill the basic functions of money as a store of value, means of exchange, and unit of account. Because their value is highly volatile, they have little use so far as a unit of account or a store of value.

The key factor is the way in which blocks are verified by the network. Bitcoin, for example, uses a ‘proof-of-work’ algorithm, which is very energy intensive. The supply of coins changes over time as new coins are mined or released. Mining is the process by which ‘blocks’ of transactions are verified, and new coins released. Bitcoin is currently mined at a rate of 12.5 new coins for every verified block, with the reward halving roughly every four years (the final bitcoins will be mined around the year 2140).

This is not the case with cryptocurrencies, which use a decentralised database called Blockchain. In essence, cryptocurrencies, also called digital currencies or crypto-currencies, among others, are nothing more than https://calvenridge.ca/ fully digital money. For example, you can physically touch a euro, but the same is not true of cryptocurrencies. Ethereum uses Ether, its platform-specific cryptographic token. Ether is used to pay validators who stake their coins for their work on the blockchain, as an off-chain payment method, and as an investment by speculators.

• Dogecoin was created by software engineers, Billy Markus and Jackson Palmer, in 2013.
• This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies, and the accuracy or timeliness of the information can’t be guaranteed.
• Examples include Storj tokens, which let people share files across a decentralized network, or Namecoin.
• Markus and Palmer reportedly created the coin as a joke, commenting on the wild speculation of the cryptocurrency market.
• Instead, client applications sign and send transactions to the ledger servers.
• There are many reasons why this is the case, including strict regulations, accessibility of the coins, infrastructure, and stability – cryptocurrencies are very volatile.

Crypto mining can help energy volatility, Paradigm responds to policy onslaught

Ripple coins, on the other hand, were pre-mined by its founders and are currently being released at a rate of one billion per month. Their purposes range from being a joke to a coin that pays for transactions on a distributed and global virtual machine. Where they will all end up is anyone’s guess, but the years that have passed since they first appeared seem to suggest they aren’t going anywhere soon.

Kraken partners with Magma Devs to leverage Lava Network’s technology for global trading operations

Solana had a market cap of over $68 billion and was valued at around $122 per coin as of Dec. 24, 2025. On Dec. 24, 2025, Tether was the third-largest cryptocurrency by market cap, which stood at over $186 billion. Bitcoin (BTC) has not only been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer network. It has also become the de facto standard for cryptocurrencies, inspiring a legion of followers and spinoffs. However, like Bitcoin, cryptocurrencies come with a vast amount of risk.

IG International Limited receives services from other members of the IG Group including IG Markets Limited. Find out more about a range of markets and test yourself with IG Academy’s online courses. On Sep. 15, 2022, Ethereum completed its long-anticipated transition to the proof-of-stake (PoS) validation method. PoS is less energy-intensive because it removes incentivized mining, makes the blockchain more efficient, and allows it to scale better. Cryptocurrencies are almost always designed to be free from government manipulation and control.

In this way we have a database distributed all over the world, constantly supervised and using strong cryptographic security controls. For some time now, the use of cryptocurrencies or digital currencies has been increasing, even in ‘ordinary’ shops, where it is now possible to pay with them. Far from being something exclusive and reserved for a small sector, the adoption of these assets is increasing and anyone can acquire them. An increasingly extensive and complex financial system gave rise to the need for trusted intermediaries and credible accounting systems. The development of double-entry bookkeeping in Renaissance Italy was a major innovation that strengthened the role of large private banks.