Crypto 101. What is…cryptocurrency?  

Your 5-minute(ish) intro to the basics of crypto.
WRITTEN BY
Daniel Taylor
28/04/2022
5 min

So, you want to know more about cryptocurrency? ‘Crypto’. It’s such a small word, with such big meaning. And I’m sure you’ll already have your own ideas - positive or negative - of what it’s all about. 

In this 5-minute 101 guide, let’s peel back the layers, pull back the curtain and get to the basics of what we mean when we talk about that buzzword ‘crypto’. 

What is crypto, aka cryptocurrency?

First things first, we need a basic definition. What is cryptocurrency? One way to think of it is that ‘cryptocurrency’ has two chunks - the ‘crypto’ part and the ‘currency’ part. 

The ‘currency’ part is showing you that cryptocurrency is designed to do the same things you would expect of any other money. You should be able to buy things with it. Keep value in it. So far, so familiar.

The ‘crypto’ part, on the other hand, is explaining how that currency, or money, is secured. Which - and this is what separates ‘crypto’ currency from any other type of currency - is through cryptography or, to think of it most broadly, computing. 

Whereas ‘traditional’ currency is secured, guaranteed and managed via central authorities - think government, think bank - ‘crypto’ currency instead relies on the techniques of cryptography and a distributed global network of computers. 

Simplify ‘crypto’ to ‘digital’, and ‘currency’ to ‘money’ and you have your 101 definition:  cryptocurrency is a form of digital money.

Yes, but what is it?

So what practically do we mean by all that? Well, putting the tech to one side for a moment, realise that we’re talking, at its core, about a new, alternative form of money.

Sure, there are some key mindset shifts to get your head around. But, at the end of the day, crypto is still just a form of money - different governance, different set-up, yes, but money all the same.

And as digital money, it’s a lot closer to what you’re already used to than you might think. How often do you use cash these days? And how often your card, or just your mobile phone? 

Consciously or not, digital money is already something we use every day. Yes, crypto takes it a step further in being digital-only (it’s 100% virtual), but how different can we say that is from the bulk of our everyday finances in the first place?

The simple way to think about it is that crypto is a new way of approaching money, part of a money evolution that runs all the way from barter to the Apple Pay swipe.

So why are people excited about it?

Let’s not beat around the bush, some people have made a lot of money from crypto, and making money is one of the main reasons crypto might come onto your radar in the first place. The million dollar question: where does that value come from?

For cryptocurrencies specifically, we can do exactly the same chunking we did before, and again boil it down to two essential elements: the ‘practical’ (currency) benefits and the ‘system’ (crypto) benefits.

Practically, as currency, cryptocurrencies offer advantages as a form of money and form of payment. 

  • They are global and borderless: no international exchange rates, no geographical borders, nowhere ‘out of service’.
  • They let you cut out middlemen with direct individual-to-individual payments: no bank service charges, no day-long settlements, no third-party dependency.
  • They are held directly by the individual: on nothing more complicated than a mobile phone, wherever you are in the world, and with 100% control (think electronic cash).

Theoretically, as a system, cryptocurrencies aim - through technology - to provide a new vision of what a money network is. 

  • Open, public, permissionless and inclusive access to money (as a counterweight to closed systems with human gatekeepers - ‘application denied’);
  • A tamper-proof, transparent, non-people-dependent system of record-keeping (as a counter to corruption, revisionism and fraud);
  • A decentralised (i.e. globally distributed), self-sovereign system of governance, issuance and ownership (as a counterweight to the monopolised control over money by centralised authorities); and
  • A fundamentally neutral, self-sufficient technology infrastructure (as a counterbalance to censorship, financial coercion and denial of access).

Clearly, there’s a lot of nuance here, and definitely more than can be summed up in a few short bullet points. Full disclaimer: cryptocurrencies are unregulated in the UK, profits may be subject to Capital Gains Tax, and the value of investments is variable and can go down as well as up. Our biggest strengths are often also our biggest flaws, and that goes for crypto as much as anything else. Whether you think it has a role to play in the future is for you to decide. 

I want to know more - how do I use it?

To get started, you’ll need a crypto wallet - something that lets you store it, send it, spend it. There are lots of beginner-friendly wallets out there (we like to think Zumo is one!).  

Once you have your crypto, you can send it directly from one individual to another, anywhere in the world, to anyone else who also has a crypto wallet that supports the cryptocurrency you want to send. 

If a merchant accepts a cryptocurrency you own as a payment option, you can make crypto payments straight to their wallet. Or - a great hybrid option - you can take advantage of crypto linked debit cards that allow you to swap your crypto into another currency (say British pounds) whenever suits you, and then use that money to make your everyday payments. 

Of course, there’s a lot further down the rabbithole you can go - but getting started is actually a lot easier than you might think.

How the meaning of ‘crypto’ has changed over time: currency > platform > ecosystem

This might be a good point to mention that there’s much more to crypto than cryptocurrency. This might seem an odd statement to make given everything we’ve just discussed. The point is, though, the scope of the term has expanded greatly even in the short span of crypto’s existence.

What we’ve covered in this article so far is the concept of crypto as currency - the 101 definition and what you would think of first when you consider, for example, Bitcoin - the first and most well-known of the cryptocurrencies (remember though, cryptocurrency isn’t Bitcoin, Bitcoin is just one example of the many many cryptocurrencies out there!). 

So that you’re aware, what has developed since has immeasurably broadened the scope of the term. Out of cryptocurrency has come also the ability to develop entire platforms with their own decentralised applications: money lending and borrowing, say, to sit on top of simple payments. And now, another buzzword - Web 3.0 - speaks to the idea of an entire crypto ecosystem of value, itself a network of decentralised platforms in which cryptocurrency, as decentralised money, is just one lego and building block in an open, permissionless, global decentralised architecture that could span to pretty much any area of our lives - our digital identities, the way we interact with online services, even the way we work and organise ourselves.

In short, know that when people talk about ‘crypto’, they might mean a lot of different things, and that’s only going to evolve as the space itself develops at speed. As with any fledgling technology, the majority of crypto’s use cases are likely still to be discovered - and that’s a pretty exciting thought given everything that’s already happened so far. 

In closing: where can I find out more?


Crypto is a lot to get your head around. Money that doesn’t physically exist? Currency networks governed by computers not people? No government, no banks? But when the switch flips, it’s probably also one of the most interesting money (and, increasingly, non-money) concepts we’ve come up with in a long time. If your curiosity has been piqued by this glance under the hood of the cryptocurrency phenomenon, there are lots more resources here on the site to guide you through some of the things you might want to know. Why not get started with our guides to the original big hitters of cryptocurrency - Bitcoin and Ethereum. Or check out one of our customer stories discussing how others have found their way into crypto. Or dive into one of our application-focused pieces, such as decentralised finance or NFTs. The choice, as they say, is yours!