A cryptocurrency, crypto-currency, or colloquially, crypto, is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.

[16] Like bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange BitGold) was described as an electronic currency system that required users to complete a proof of work function with solutions being cryptographically put together and published.

[24] In June 2021, El Salvador became the first country to accept bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.

"[32] Technology analyst Avivah Litan commented on the cryptocurrency ecosystem that "everything...needs to improve dramatically in terms of user experience, controls, safety, customer service.

[citation needed] In the case of cryptocurrency, companies or governments cannot produce new units and have not so far provided backing for other firms, banks, or corporate entities that hold asset value measured in it.

Not only do miners have to factor in the costs associated with expensive equipment necessary to stand a chance of solving a hash problem, they must further consider the significant amount of electrical power in search of the solution.

The kiosk installed in Austin, Texas, is similar to bank ATMs but has scanners to read government-issued identification such as a driver's license or a passport to confirm users' identities.

In response to numerous requests by industry representatives, a legislative ICO working group began to issue legal guidelines in 2018, which are intended to remove uncertainty from cryptocurrency offerings and to establish sustainable business practices.

[115] In the longer term, of the 10 leading cryptocurrencies identified by the total value of coins in circulation in January 2018, only four (bitcoin, Ethereum, Cardano and Ripple (XRP)) were still in that position in early 2022.

[117][118] The Wall Street Journal has commented that the crypto sector has become "intertwined" with the rest of the capital markets and "sensitive to the same forces that drive tech stocks and other risk assets," such as inflation forecasts.

[122] David Golumbia says that the ideas influencing bitcoin advocates emerge from right-wing extremist movements such as the Liberty Lobby and the John Birch Society and their anti-Central Bank rhetoric, or, more recently, Ron Paul and Tea Party-style libertarianism.

[129] In May 2020, the Joint Working Group on interVASP Messaging Standards published "IVMS 101", a universal common language for communication of required originator and beneficiary information between VASPs.

[130] In June 2020, FATF updated its guidance to include the "Travel Rule" for cryptocurrencies, a measure which mandates that VASPs obtain, hold, and exchange information about the originators and beneficiaries of virtual asset transfers.

But if we start now, we can achieve the goal of maintaining financial stability while also enjoying the benefits which the underlying technological innovations bring,"[135] In May 2024, 15 years after the advent of the first blockchain, bitcoin, the US Congress advanced a bill to the full House of Representatives to provide regulatory clarity for digital assets.

These tokens, which are pegged to the value of fiat currencies, may allow individuals to bypass important public policy goals related to traditional banking and financial systems, such as anti-money laundering, tax compliance, and sanctions.

[165] The Department of the Treasury, on 20 May 2021, announced that it would require any transfer worth $10,000 or more to be reported to the Internal Revenue Service since cryptocurrency already posed a problem where illegal activity like tax evasion was facilitated broadly.

According to the Library of Congress in 2021, an "absolute ban" on trading or using cryptocurrencies applies in 9 countries: Algeria, Bangladesh, Bolivia, China, Egypt, Iraq, Morocco, Nepal, and the United Arab Emirates.

An "implicit ban" applies in another 39 countries or regions, which include: Bahrain, Benin, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, the Dominican Republic, Ecuador, Gabon, Georgia, Guyana, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Lesotho, Macau, Maldives, Mali, Moldova, Namibia, Niger, Nigeria, Oman, Pakistan, Palau, Republic of Congo, Saudi Arabia, Senegal, Tajikistan, Tanzania, Togo, Turkey, Turkmenistan, Qatar and Vietnam.

[181] Cryptocurrency advertisements have been banned on the following platforms: On 25 March 2014, the United States Internal Revenue Service (IRS) ruled that bitcoin will be treated as property for tax purposes.

[200] Garza had founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015.

[210] Blockchain analysis company Chainalysis concluded that illicit activities like cybercrime, money laundering and terrorism financing made up only 0.15% of all crypto transactions conducted in 2021, representing a total of $14 billion.

[222] However, Russians are also leaders in the benign adoption of cryptocurrencies, as the ruble is unreliable, and President Putin favours the idea of "overcoming the excessive domination of the limited number of reserve currencies.

[citation needed] This type of ambiguous classification puts pressure on law enforcement agencies around the world to adapt to the shifting drug trade of dark markets.

[231] In April 2022, the computer programmer Virgil Griffith received a five-year prison sentence in the US for attending a Pyongyang cryptocurrency conference, where he gave a presentation on blockchains which might be used for sanctions evasion.

[241][242] Of 1,000 respondents between the ages of eighteen and forty, almost 70% wrongly assumed cryptocurrencies were regulated, 75% of younger crypto investors claimed to be driven by competition with friends and family, 58% said that social media enticed them to make high risk investments.

[245] In 2014, Gareth Murphy, a senior banking officer, suggested that the widespread adoption of cryptocurrencies may lead to too much money being obfuscated, blinding economists who would use such information to better steer the economy.

A paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student found that in 2017 the price of bitcoin had been substantially inflated using another cryptocurrency, Tether.

[250] Roger Lowenstein, author of "Bank of America: The Epic Struggle to Create the Federal Reserve," says in a New York Times story that FTX will face over $8 billion in claims.

This convergence marked a significant trend where conventional financial actors were adopting blockchain technology to enhance operational efficiency, while the crypto world introduced innovations like Security Token Offering (STO), enabling new ways of fundraising.

[289] Bitcoin has been characterized as a speculative bubble by eight winners of the Nobel Memorial Prize in Economic Sciences: Paul Krugman,[290] Robert J. Shiller,[291] Joseph Stiglitz,[292] Richard Thaler,[293] James Heckman,[294] Thomas Sargent,[294] Angus Deaton,[294] and Oliver Hart;[294] and by central bank officials including Alan Greenspan,[295] Agustín Carstens,[296] Vítor Constâncio,[297] and Nout Wellink.