A plain English guide to crypto, blockchain, and how it all fits together — no technical knowledge required.
Cryptocurrency is a form of digital money. Unlike pounds, euros or dollars, it isn't issued or controlled by a government or central bank. Instead, it runs on a technology called blockchain — a shared, decentralised record of transactions.
The word "crypto" comes from the cryptography used to secure transactions. Every time someone sends or receives cryptocurrency, the transaction is verified by a network of computers and added permanently to the blockchain — a public record that anyone can view but nobody can alter.
The simplest way to think about it: cryptocurrency is digital money that lives on the internet, isn't controlled by any one organisation, and uses complex maths to keep transactions secure.
Bitcoin was the first cryptocurrency, created in 2009 by an anonymous person or group using the name Satoshi Nakamoto. The original idea was to create a form of money that could be sent between people anywhere in the world, without needing a bank to process the transaction.
Bitcoin has a fixed maximum supply of 21 million coins. Nobody can create more than that — this scarcity is built into the code. Supporters argue this makes it a reliable store of value, similar to gold. Critics point to its extreme price volatility and high energy consumption.
Bitcoin remains the largest cryptocurrency by market value and is usually the first one beginners encounter.
Ethereum is the second-largest cryptocurrency. Launched in 2015, it goes beyond being a simple currency — it's a programmable blockchain. Developers can build applications on top of Ethereum, called decentralised apps (dApps).
Ethereum introduced the concept of smart contracts — self-executing pieces of code that automatically carry out the terms of an agreement when certain conditions are met. This powers everything from digital art (NFTs) to decentralised finance platforms.
Ethereum's currency is called Ether (ETH), though people often refer to the currency and the network interchangeably as "Ethereum".
Any cryptocurrency that isn't Bitcoin is referred to as an altcoin (alternative coin). There are thousands of them. Some are serious projects with genuine use cases. Many are speculative, short-lived, or outright scams.
Well-known altcoins include:
As a beginner, stick to well-established, large-cap cryptocurrencies until you understand what you're investing in. The smaller and newer the coin, the higher the risk.
Blockchain is the underlying technology that makes cryptocurrency possible. Here's how it works:
Someone sends cryptocurrency to another person. This transaction is broadcast to a network of thousands of computers (nodes).
The network of computers checks that the sender actually has the funds and hasn't already spent them elsewhere. This prevents fraud without needing a bank.
Verified transactions are grouped together into a block. This block is added to the end of the existing chain of blocks — hence "blockchain".
Once added, the transaction cannot be altered or deleted. Every computer on the network holds a copy of this record, making it extremely difficult to hack or falsify.
The blockchain technology itself is highly secure. The risks come from other sources: