What is a Cryptocurrency? Explained in Simple Terms

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What is cryptocurrency in simple terms? Simply put, it is money on the internet, but without physical coins or notes. It takes place digitally and is not controlled by a central bank or government. It sounds futuristic, but it is already a reality. It is changing the whole world, the financial system, the economy, and even everyday life. Let’s see why virtual currencies are so popular now, what is behind them, and how they work.

Why is it important to understand cryptocurrencies? How is our world changing?

Don’t think that cryptocurrencies are a fad, like everything that was once fashionable. It is changing not only the financial sector, but also global economic processes. For example, in 2023, the global cryptocurrency transaction volume was about 5 trillion US dollars. According to statistics, the cryptocurrency market will continue to grow in 2024. Cryptocurrency transactions will account for 10% of global monetary transactions.

The biggest difference between cryptocurrencies and traditional money is decentralization. It doesn’t work through a bank, but through a blockchain: a distributed database. This means that all transactions are transparent, secure, and, most importantly, instantaneous. For example, you can transfer money from one side of the world to the other in a matter of minutes, without the fees that banks charge. And for countries where access to traditional financial institutions is limited, cryptocurrencies are becoming a true revolution.

What is cryptocurrency in simple terms? Let’s analyze the concept.

When people talk about cryptocurrency, most people immediately think of Bitcoin, the first and most popular virtual currency. But in fact, this is just the beginning. Simply put, cryptocurrency is digital money that does not exist in physical form and is not controlled by a central authority. It works through a system called blockchain. This is a chain of data blocks stored on millions of computers around the world.

To understand the concept, imagine that each block is a page in a book. It records all transactions and cannot be deleted or changed. Blockchain is a kind of public ledger of all transactions, accessible to all participants in the network. But this does not mean that the data is public. It is protected by cryptographic algorithms that allow participants to remain anonymous.

How cryptocurrencies work: a look behind the scenes of the technology

To understand the details, it is necessary to know something about the business process itself. Cryptocurrencies are based on blockchain technology. It is not just a database, but a decentralized system without intermediaries. All transactions are recorded in blocks, and blocks are recorded in a chain. They are not generated and verified by a single party, but by thousands of computers.

Each participant (or node) in the network stores a complete copy of all records. It is no longer possible to change or falsify the information. Miners are responsible for verifying transactions: users make sure that the system works and receive a reward in the form of cryptocurrency. Mining is a process in which computers solve complex mathematical problems to verify the accuracy of transactions.

Types of cryptocurrencies: not all money is the same

When we talk about virtual currencies, we usually mean Bitcoin (BTC) or Ethereum (ETH). There are actually many different types. Let’s take a look at the most popular ones:

Bitcoin (BTC) is a pioneer in the world of cryptocurrencies. It was created in 2009 by a mysterious creator named Satoshi Nakamoto. It is mainly used as a means of accumulation and investment, although it can also be used for payments.
Ethereum (ETH) is a complete platform for creating smart contracts. It allows you to create decentralized applications (dApps) and perform complex operations such as token swaps, all without intermediaries. Many projects operate on Ethereum, including DeFi (decentralized finance).
Litecoin (LTC) was developed as a faster and cheaper alternative to Bitcoin and is ideal for micropayments.
Ripple (XRP) focuses on bank transfers. It is actively used for international transactions.
Stablecoins (like USDT) are pegged to real assets, like the US dollar. This minimizes volatility, making them suitable for settling and storing funds.

How do cryptocurrencies differ from regular money?

Cryptocurrencies are not just money, as everyone knows. Regular dollars and euros are controlled by government institutions and central banks. Unlike cryptocurrencies, they are not dependent on governments or financial regulators. It is not tied to physical assets, but exists exclusively in the digital space.

How do I buy cryptocurrencies? Step-by-step instructions:

Select a platform to buy. The most popular crypto exchanges are Binance, Coinbase, and Kraken. You can buy everything from Bitcoin to Ethereum and even more exotic coins.
Register on the platform. In order to shop, you will need to register, fill in your details, and confirm your identity.
Top up your account. This can be done via bank transfer, credit card, or other cryptocurrencies.
Select the cryptocurrency you want to buy. On the platform, you will need to select the currency you want to buy.
Make a purchase. Once the money is credited to your account, you can buy virtual currency.
Transfer cryptocurrency to your wallet. For security reasons, it is best to store your money in a wallet rather than on an exchange.

Where to safely store cryptocurrency: an overview of the best options

When it comes to storing coins, we distinguish two main types of wallets: hot and cold wallets. Hot: always connected to the network. These options are ideal for people who make frequent transactions, as they allow you to send and receive money instantly.

Cold storage devices, on the other hand, are devices that are physically isolated from the internet. They are considered the safest, as the cryptocurrency is not at risk of being hacked via the network.

Popular cold wallets: Ledger and Trezor. They offer secure encryption and storage of private keys on physical media. For everyday use, trendy formats such as Exodus and Trust Wallet are useful. They are easy to use and support a wide range of cryptocurrencies.

When choosing, always keep the following in mind: the larger the amount, the more secure the storage method should be.

Conclusion

Now that you understand what cryptocurrency is, how it works in short, and how it differs from traditional money, you can take action. The most important thing to remember is that this is not just another financial instrument, but part of a new economy. The sooner you start understanding the process, the sooner you will enter the future.

List of the most traded cryptocurrencies in 2025: market leaders and new trends

The digital assets market remains one of the most dynamic directions for trading and investments. In 2025, traders’ attention is focused on assets with high liquidity, sharp price fluctuations, and stable trading volume. The most traded cryptocurrencies form the basis of daily transactions on exchanges and account for a significant share of all platform turnover. They are in demand both among long-term investors and in short-term speculative strategies. Understanding which coins are included in the list allows for more accurate portfolio construction, risk management, and market movement forecasting.

## Criteria for Rating Formation

To be included in the list of the most active digital assets, a coin must meet a number of parameters:

– High daily trading volume;
– Stable liquidity on all key exchanges;
– Broad support among traders and investors;
– High volatility or stability (depending on the category);
– Significant capitalization and constant presence in the news agenda.

It is these cryptocurrencies with high trading volume that form a pool that interests both institutional players and private traders.

## Main Categories of the Most Traded Cryptocurrencies

Three types of assets can be distinguished on the market, which most often end up on the list of volume leaders:

– Classic currencies — Bitcoin, Ethereum;
– Stablecoins — USDT, USDC, DAI, FDUSD;
– Altcoins — Solana, Dogecoin, XRP, PEPE.

Each group plays an important role in daily trading. The most traded cryptocurrencies are represented in all three categories, allowing traders to combine strategies within a single portfolio.

### BTC (Bitcoin)

Bitcoin remains the main digital asset in terms of trading volume and capitalization. Trading activity is supported by the interest of institutional investors, constant volatility, and limited supply.

Despite its established reputation as “digital gold,” Bitcoin maintains high daily turnover and continues to dominate in spot and derivative trading segments. Among all assets, the most traded cryptocurrencies are almost always led by Bitcoin.

### ETH (Ethereum)

Ethereum consistently holds the second position in terms of liquidity and daily volume. It is in demand due to DeFi, NFT, dApps support, and active work with smart contracts. Ethereum is used as a means of settlement within ecosystems and remains one of the most discussed assets. Among the list of top traded cryptocurrencies, ETH consistently ranks in the top three.

### USDT (Tether USDt)

Tether is the main stablecoin and dominates in terms of trading volume. It is used as the base currency in most trading pairs. Thanks to its peg to the dollar, USDT minimizes price fluctuations and facilitates asset settlements.

Its liquidity, stability, and wide distribution make it an indispensable tool in the market. Among all the most liquid cryptocurrencies, Tether provides the foundation for daily trading.

### USDC (USD Coin)

The second most popular stablecoin after USDT, USDC offers a high level of transparency and support from major financial players. It is actively used in DeFi applications, for staking, and settlements.

Its trading volume lags behind Tether but continues to grow. In 2025, it is among those shaping the most traded cryptocurrencies on most platforms.

### DAI (Dai)

DAI is a decentralized stablecoin backed by collateral on the Ethereum blockchain. Its feature is an autonomous model of maintaining the exchange rate without centralized issuance. DAI is widely used within DeFi ecosystems, including for lending, borrowing, and trading. Thanks to its properties, it confidently ranks among the best cryptocurrencies for trading, especially for those focusing on decentralization.

### FDUSD (First Digital USD)

A relatively new player in the stablecoin market, FDUSD is rapidly gaining popularity due to transparent reserves and support from major Asian platforms. Its volumes continue to grow, and liquidity is strengthened by expanding trading pairs. As of 2025, it consistently ranks among those listed as the most traded cryptocurrencies.

### XRP (Ripple)

XRP maintains high popularity due to its focus on cross-border payments. Its transaction speed and low fees make it convenient for trading operations and international settlements. Despite regulatory difficulties in the past, XRP remains among actively traded coins, thanks to community support and integration into payment platforms.

### SOL (Solana)

Solana demonstrates one of the highest blockchain transaction speeds. It is actively used in NFTs, gaming, DeFi, and application development. High throughput and low fees make it popular among developers and traders. Solana consistently ranks among the top traded cryptocurrencies and strengthens its position amid the growth of new projects within its network.

### DOGE (Dogecoin)

Dogecoin started as a joke currency but has become one of the most liquid instruments. Support from public figures and high volatility have ensured steady interest in it in the spot and futures markets. It is often used for short-term trades. Among all those making up the most traded cryptocurrencies, Dogecoin holds a unique position due to its unpredictability.

### PEPE (Pepe)

One of the prominent representatives of meme cryptocurrencies of the new generation. PEPE has gained popularity due to virality and high interest from retail investors. Despite its low capitalization, its daily turnover is on par with major altcoins. This makes it part of the list of the most traded cryptocurrencies, especially among those seeking short-term speculative profits.

## How to Choose an Asset for Trading

Before including a cryptocurrency in a portfolio, a trader evaluates a number of parameters:

– Liquidity stability on exchanges;
– Average daily trading volume;
– Price change charts;
– Price fluctuation frequency and average volatility range;
– Fundamental news and community activity;
– Support in the spot and derivative segments.

A choice based on these indicators helps filter out low-activity coins and focus on those that consistently rank among the most traded cryptocurrencies.

## The Most Traded Cryptocurrencies: Key Points

The cryptocurrency market in 2025 still stands out for its high activity, with liquid assets occupying leading positions in traders’ portfolios. The most traded cryptocurrencies are not just digital assets with catchy names but tools verified by volume, market reaction, and the trust of millions of users.

The ability to analyze liquidity, choose reliable coins, and use them in trading is the key to a successful strategy at any stage of the market cycle!

April 23, 2025

Инвестиции в криптовалюту для начинающих: что нужно знать перед первым шагом

The financial world is rapidly transforming, and digital assets are increasingly entering everyday economics. However, for those who are just considering investments, investing in cryptocurrency for beginners may seem like a daunting maze of terms, risks, and new platforms. Where to start? How not to get lost in the sea of offers and avoid mistakes at the beginning?

If you are wondering “how to invest in cryptocurrency for beginners,” it is important to understand that investing in crypto requires not only desire but also an understanding of basic principles, technologies, and strategies. This article is a practical guide that will help you build a conscious approach, understand the basics, and assess potential risks. If you are looking for a guide on investing in cryptocurrency, here you will find all the key points for a confident start!

Why should beginners understand investments?

In the era of digital transformation, investments in blockchain assets have become more accessible than ever. But the paradox is that easy access creates an illusion of simplicity that does not actually exist. Therefore, any investments in cryptocurrency for beginners should start not with buying, but with learning – about the market, tools, platform mechanisms, and the term itself.

Understanding blockchain principles, the role of exchanges, the differences between Bitcoin, Ethereum, and other coins is the starting point. Without this, even the most promising strategies can lead to losses rather than profits.

Investing in cryptocurrency for beginners: how to build a safe strategy?

When moving to practice, it is important to establish a basic set of rules that will help minimize mistakes at the beginning. At the core are three pillars: goal, strategy, and tools. Investment is always a long-term game, not an attempt to “get rich in a week.”

Keep in mind that the market is highly volatile and subject to fluctuations. Therefore, it is crucial to define your goal: speculation, savings, participation in technology, or portfolio diversification. And only then – choose platforms, wallets, purchase methods, and market entry models.

How to correctly invest in cryptocurrency as a beginner: step-by-step guide

For beginners, it is important not to rush into trading but to go through a preparation process. Here are the actions to take at the very beginning:

create an account on a reliable cryptocurrency exchange – with a good reputation and support in Russian;
study the available assets – Bitcoin, Ethereum, and stablecoins to understand what exactly you want to invest in;
open a wallet – hardware or software, custodial or non-custodial, considering your level of preparation;
determine your budget – start with an amount that will not impact your financial position if lost;
develop a strategy – holding, trading, or regular purchases with a fixed amount.

The algorithm will help you establish the first contact with the market without haste and unwarranted decisions – this is especially important when it comes to investing in cryptocurrency for beginners.

Pros and cons of cryptocurrency investments

Cryptocurrency, like any asset, has its pros and cons. Among the advantages are high potential returns, accessibility (you can start investing in cryptocurrency with minimal amounts), global reach, and independence from governmental systems. It is also worth noting the liquidity of popular coins and access to innovative tools such as DeFi, NFTs, and staking.

However, investing in digital assets comes with risks. The market is highly volatile, lacks governmental guarantees, and involves technical complexity. Beginners need to understand wallet mechanisms, blockchain principles, and security measures. Losing a seed phrase or security mistakes can lead to loss of access to funds.

By understanding the specifics, you can approach investments in cryptocurrency for beginners consciously and make decisions based on logic rather than emotions.

Risks of investing in cryptocurrency: what beginners should consider?

The main challenge for those who are just starting out is risks. They are always present, even when investing in proven assets. It is especially important for beginners to consider:

lack of regulation – the market remains semi-legalized in many countries;
high sensitivity to news – statements by Elon Musk or central banks instantly affect the exchange rate;
influence of speculators – many players manipulate the market for extra profit;
technical failures – from platform crashes to incorrect wallet operations;
user errors – transfers to wrong addresses, forgotten seed phrases, incorrect order settings.

By understanding the threats, you can prepare in advance and minimize their impact.

What to pay attention to in order to avoid mistakes in crypto investing?

Inexperienced users often make the same mistakes. To avoid them, it is important to consider key aspects on which investments in cryptocurrency for beginners are built:

ignoring personal analysis – blindly following influencers or “insider information”;
lack of diversification – investing only in one token;
lack of goal – buying for the sake of buying, without a strategy;
storing assets on an exchange, not in a wallet;
ignoring tax implications – not knowing reporting requirements.

Check all steps, even if it seems that everything is simple.

Which crypto to choose at the beginning: guidelines for beginners

Beginners are recommended to start with the most stable and recognized options that have proven themselves in the market and serve as a starting point for most investors. Among such assets are Bitcoin (BTC), considered the flagship of the crypto market and the first decentralized digital currency. Ethereum (ETH) also plays a significant role – the second in terms of market capitalization, actively used for creating smart contracts and decentralized applications.

Special attention should be paid to stablecoins such as USDT and USDC, pegged to the US dollar exchange rate. Platform tokens are also in demand, including BNB, SOL, and ADA, which support blockchain application ecosystems and stand out for scalability and functionality. It is often these assets that become part of the strategy when it comes to investing in cryptocurrency for beginners.

By starting with these assets, you can minimize risks and gain a basic understanding of how the crypto market works, which will pave the way for more complex investment instruments in the future.

Investing in cryptocurrency for beginners: conclusions

Starting the journey in digital finance should begin with understanding the basics. Investing in cryptocurrency for beginners is not about gambling and hype, but about strategy, learning, and risk management.

Those who are willing to delve in, learn, and adapt will be able to use the potential of crypto assets to build real capital. The key is not to rush, think systematically, and not be afraid to ask questions.

Technologies are changing the world, and participation in the process is a matter of time. Let your investment strategy be based not on emotions but on knowledge and clear goals.

April 23, 2025