In 2025, it’s safe to say that everyone has heard about cryptocurrencies. Many trusted websites publish news regarding the Crypto world, and with today’s technology, it’s easier than ever to stay informed on such topics. It’s obvious that we’ve heard of them, but do we actually understand what cryptocurrencies are?
Cryptocurrencies have sparked a revolution in how we think about money, trust, and finance. From Bitcoin’s inception in 2009 to today’s sprawling ecosystem of digital assets, this technology challenges traditional financial systems and invites everyone from casual users to institutional investors into a brave new world without banks or borders.
Here’s everything you need to know about cryptocurrencies.
What Is Cryptocurrency?
At its core, cryptocurrency is digital money created and managed electronically. Unlike Canadian dollars or any fiat currency, cryptocurrencies aren’t issued or controlled by any government or bank. They run on decentralized computer networks using cleverly designed algorithms and cryptography to verify transactions and control supply. The system relies on a technology called blockchain — a public digital ledger shared across many computers, making cheating or double spending nearly impossible.
Bitcoin was the pioneer, solving a critical problem: how to prevent digital coins from being spent twice. It did this through decentralized consensus, where many independent network participants agree on transaction validity, removing the need for trusted middlemen.
The Blockchain
Think of blockchain as an immutable, open notebook everyone in the network has a copy of. When transactions happen, they’re bundled into “blocks,” cryptographically linked in a chain that grows longer with each new block confirmed. Changing one block would require changing every subsequent block on most copies, which is practically impossible and prohibitively expensive.
This distributed setup means no single authority controls the ledger. Instead, the network collectively decides which transactions are valid, ensuring trust without traditional banks.
Why Do Cryptocurrencies Matter?
Unlike physical currency, cryptocurrency holds no intrinsic value — it can’t be exchanged for gold or backed by a government promise. Its value comes from network utility and user trust built into the protocol. Many investors see Bitcoin as “digital gold,” a store of value that offers potential high returns, despite its notorious price swings.
Cryptos also enable cheaper, faster money transfers by cutting out intermediaries like banks and payment processors.
Staying Safe and Informed
Many Canadians access cryptocurrencies through centralized exchanges like Coinbase or local platforms that offer wallet services. There are two main types of wallets: custodial, where a company holds your keys, and non-custodial, where you’re solely responsible for your keys (and your security).
Security is crucial. If you lose access to your digital wallet or fall victim to a scam, your funds might be gone forever. Plus, the rapidly evolving regulatory landscape adds uncertainty, with governments still figuring out how to classify and oversee these new assets.
Waiting for transaction confirmations before accepting payments helps avoid double-spending attacks. The blockchain’s consensus methods, such as Proof-of-Work or Proof-of-Stake, provide additional layers of security against fraud and tampering.