Cryptocurrency is virtual money that exists only on the internet. It does not exist as paper bills or coins, and it cannot be forged. Instead, its value is based on online speculation. It is a highly volatile investment, so it’s important to diversify your portfolio.

In addition to its role as an investment, cryptocurrency can also be used to purchase goods and services. A growing list of companies both online and in brick-and-mortar stores accept crypto as payment. For example, you can buy food, clothing, electronics, and even event tickets with Bitcoin and other cryptos. The most popular crypto is Bitcoin, but there are thousands of other options.

A cryptocurrency’s value is based on online speculation, so it can rise and fall dramatically. This volatility is why it is essential to diversify your portfolio, and to invest only a small portion of your available assets in crypto. The crypto market is notorious for scams and phishing attempts, so be wary of claims that seem too good to be true.

The decentralized technology that powers cryptocurrency is called blockchain. It allows people to verify transactions without the need for a central authority like a bank. This allows for very low transaction fees. It also makes it very difficult for hackers to steal your cryptocurrency.

While cryptocurrencies are becoming more mainstream, they still lack the consumer protections that come with traditional financial products like credit cards. That could change as regulators explore ways to regulate the industry and create standards that protect consumers.

One area where crypto is gaining in popularity is as a way to pay for gaming content. For example, players in the video game Fortnite can earn in-game currency by using a feature called the ‘Surveillance Drone’ to track enemies and collect loot. The drone can also crack open loot bins and retrieve fallen teammate’s respawn beacons.

In other gaming worlds, gamers can use a digital token that represents a character in the game to unlock special abilities and upgrades. These digital tokens are known as crypto-tokens, or NFTs (non-fungible tokens). The NFTs can be traded on the blockchain, which makes them an attractive asset for investors.

Cryptocurrency is not backed by any government or monetary authority, so it does not have the same consumer protections as fiat currencies like the dollar. This means that if you lose your crypto, there is no guarantee that it will be replaced or returned to you. This risk is part of the reason that some consumers are reluctant to invest in it. Other risks include the difficulty of securing and storing it, and the potential for price fluctuations that make it hard to know how much your investment is worth.