How crypto is different from the money in your pocket
The dollars, euros, or pesos in your bank account are fiat money: issued by a government, whose supply a central bank can expand or contract at will. Cryptocurrency is different in a few key ways:
- Decentralized — no central issuer or administrator. Rules are enforced by code running on many independent computers.
- Scarce or predictable — most have a fixed or algorithmically defined supply schedule (e.g. Bitcoin caps at 21 million coins).
- Digital-native — it only exists as entries on a ledger; there are no physical coins or notes.
- Peer-to-peer — you can send value directly to anyone, anywhere, without an intermediary like a bank.
- Censorship-resistant — because no single party controls it, transactions are hard to block or reverse.
Who keeps the ledger
Not just "digital cash"
Cryptocurrency is also a kind of programmable money. The same systems that move coins can run code (smart contracts), which is the foundation for DeFi, NFTs, and Web3 — covered in later units.
Key properties at a glance
| Feature | Fiat money | Cryptocurrency |
|---|---|---|
| Issuer | Government / central bank | Protocol code, decentralized |
| Supply | Flexible (policy decisions) | Fixed or algorithmic |
| Ledger | Private bank records | Public blockchain |
| Control | Centralized | Decentralized / community |
| Borders | National | Global, borderless |
| Finality | Reversible (chargebacks) | Generally irreversible |