Definition

Digital or virtual money that uses cryptography for security. Bitcoin is a well-known example, and it operates independently of traditional banks.

What to consider

  • Remember that prices can change dramatically in a short time.
  • Only invest what you’re comfortable risking.
  • Keep your digital wallet secure and back up your keys.

Real world scenarios

  • Brent invests in cryptocurrencies, diversifying his portfolio with Bitcoin and Ethereum while watching market volatility closely.
  • Ronja pays for digital services using cryptocurrency, enjoying faster cross-border transactions without traditional bank fees.
  • Kai studies the technology behind various coins before committing funds, ensuring he understands blockchain fundamentals and potential risks.

Related terms

Investments & Retirement