Cryptocurrency
A digital or virtual currency that uses cryptography for security and operates on a decentralized network, typically a blockchain. Unlike traditional currencies issued by governments, cryptocurrencies are not controlled by any central authority and use consensus mechanisms to validate transactions and maintain the integrity of the ledger.
“Bitcoin and Ethereum are cryptocurrencies that can be sent peer-to-peer anywhere in the world without requiring banks or payment processors.”
Bitcoin (BTC)
The first and largest cryptocurrency by market capitalization, created in 2009 by the pseudonymous Satoshi Nakamoto. Bitcoin is designed as a decentralized digital currency with a hard-capped supply of 21 million coins, enforced through a halving mechanism that reduces new coin issuance approximately every four years. It uses Proof of Work consensus and is often referred to as 'digital gold.'
Altcoin
Any cryptocurrency other than Bitcoin. The term combines 'alternative' and 'coin' to describe all other digital currencies that emerged after Bitcoin. Altcoins range from major platforms like Ethereum to small experimental tokens.
Token
A digital asset created on an existing blockchain rather than its own native chain. Tokens can represent a wide range of assets and utilities — from currency and governance rights to real-world assets and collectibles. Unlike coins (BTC, ETH) which are native to their blockchain, tokens are created using smart contracts on platforms like Ethereum (ERC-20, ERC-721).
Fiat Currency
Government-issued currency that is not backed by a physical commodity like gold but rather by the trust and authority of the issuing government. Fiat currencies are the traditional monetary system that cryptocurrencies aim to complement or disrupt, and serve as the primary on-ramp and pricing reference for crypto markets.