In today’s world, crypto trading has become a very popular means of passive income. People are earning handsome amounts through trading, and that is why crypto trading is rising day by day. It can undoubtedly become a very good source of income, but only when trading is done smartly. Not everyone who starts with crypto trading succeeds because it requires complete knowledge about cryptocurrency, strategies for investing, and how to identify the lows and highs of the crypto market. Here is a complete guide for you to understand the basics of cryptocurrency and how it works.

What is Cryptocurrency?

Cryptocurrency is digital currency used for crypto trading and making online transactions. Unlike the traditional currencies that are regulated by the central bank and government, cryptocurrencies are decentralized. By decentralized, it means that crypto is not regulated by one central authority. Cryptocurrency comes as coins and tokens. Coins have their own independent blockchains and are used as a medium of exchange for making payments. Whereas tokens operate on the existing blockchains that are created via smart contracts.

How Does Cryptocurrency Work?

Cryptocurrency works on blockchain technology, where all the transactions are carried out on a decentralized digital ledger. Users can make payments and send and receive money through the public and private keys. All the transactions are decentralized, secure and verified by miners rather than banks.

How is Cryptocurrency Created?

Cryptocurrencies are created in various ways. One of the most common ways through which a cryptocurrency is created is the process of mining. Mining is used for validating the crypto transactions and creating new cryptocurrency. Mining is done through powerful computers, where users need to solve complex mathematical problems and puzzles to verify their transactions. Upon solving these problems successfully, users can get newly created cryptocurrencies. Other than mining, some of the most commonly used methods to create and get cryptocurrencies are:

• Proof of Stake
• Minting
• Forking
• Airdrops

Types of Cryptocurrencies

The crypto world is massive, and so are the cryptocurrencies. So far this year, there have been over 37 million cryptocurrencies created. But not every cryptocurrency is active or used for trading; some are created for testing, and some have failed due to their poor execution. Here are some of the popular cryptocurrencies from the year 2009 (when the first cryptocurrency was launched) to this year 2025:

Cryptocurrency	Official Launch (Year)	Known For
Bitcoin (BTC)	2009	Bitcoin is known  for being the first cryptocurrency and a digital gold for long term investments.
Litecoin (LTC)	2011	Litecoin is known as a fast and cheap alternative to Bitcoin for everyday payments.
Ripple (XRP)	2012	XRP is known for cross border payment and for carrying transactions at very less commission.
Dogecoin (DOGE)	2013	Dogecoin is known for crowdfunding and tipping.
Ethereum (ETH)	2015	ETH is known for its smart contract functionality and for supporting DApps and NFTs.
Cardano (ADA)	2017	ADA is known for providing security and sustainability support to decentralized applications and systems.
Binance Coin (BNB)	2017	Binance Coin is known for being the native cryptocurrency of Binance exchange and or powering the BNB chain ecosystem.
Solana (SOL)	2020	Solana is known for handling high volumes of transactions at a low rate.
Polkadot (DOT)	2020	Polkadot is known for its interoperability to connect multiple blockchains through its multi-chain network.
Avalanche (AVAX)	2020	AVAX is known for its high performance to build DApps and blockchain networks.
Aptos (APT)	2022	APT is known for its high speed and secure blockchain that supports a wide range of applications.
Sui (SUI)	2023	SUI is known for its ability to process parallel transitions, high throughput and low latency.
Arbitrum (ARB)	2023	ARB is known for solving scalability and security problems within the Ethereum blockchain.
Worldcoin (WLD)	2023	Worldcoin is known for its iris scan to verify users to create a digital identity.
Celestia (TIA)	2023	Celestia is known for its modular blockchain design that supports fast and efficient transactions.
Blast (BLAST)	2024	Blast is known for enhancing Ethereum’s scalability and for providing a more efficient experience to blockchain users.
zkSync (ZK)	2024	ZK is known for implementing new solutions for Ethereum scaling, fast and secure transactions.
Keeta KTA	March 2025	Keeta is known for instant payments and fast transactions.

 

How to Store Cryptocurrency

Cryptocurrency is usually stored in crypto wallets. Crypto wallets are a secure way to protect the private keys and manage crypto assets. There are two types of crypto wallets:

• Hot Wallet: A hot wallet is an online wallet that stores and protects users’ private keys and assets.
• Cold Wallet: A cold wallet is an offline wallet that stores the private keys on hardware devices.

Many of the crypto exchanges provide crypto wallets within the platform. These wallets easily store and manage the crypto assets, eliminating the need to choose a separate wallet.

Benefits of Cryptocurrency

• One of the biggest benefits of cryptocurrency is that it is decentralized. The central banks reduce the value of money during inflation, whereas crypto, being a decentralized currency, protects users from inflation.
• Some of the cryptocurrencies have a very low fee as compared to traditional banks for transferring money internationally.
• Crypto has a very high level of security and transparency. It uses cryptographic algorithms and encryption to protect the users’ data and assets.
• Users can make transactions anytime, anywhere, as it operates 24/7.
• It gives users full control over their crypto assets and transactions.
• Many of the crypto assets are handled through smart contracts, which enable automation.
• It offers more opportunities to the users to invest and earn more.

Future of Cryptocurrency

Cryptocurrency, being volatile in nature, poses a risk to its use in future, but still its wider adoption by users points to its potential growth in future. Some of the traditional banks are integrating blockchain technology for transfers and payments, making it common among users. DeFi and NFTs platforms are being used in gaming and many other digital platforms, which leads to their further expansion in future. Many countries are creating new and clear laws to regulate cryptocurrency to safeguard and protect user data, so that more people can invest in it. New and energy-efficient ways for mining cryptocurrencies are underway to support a sustainable cryptocurrency ecosystem. As many of the cryptocurrencies are still in their early stage of development, there are different perspectives and debates among users about the future of cryptocurrency. While it would be completely wrong to say that cryptocurrency has no future, as there are many developments underway in the crypto world, we can expect more opportunities.