Cryptocurrencies, especially bitcoin, are relatively new coins, they were created in 2009 by an unknown person under the pseudonym Satoshi Nakamoto. The idea behind this entire project was to develop a new medium of exchange that would operate independently of any central authority, such as banks. It can be transferred electronically, in a safe way, and is easily verifiable.

Just like any other currency, bitcoin is used to pay for goods or services. In this sense, it is similar to the euro, dollars, or traditional mechanisms that can be traded online as well.

It can be used to book a hotel room in Expedia, deposit money into your Microsoft account, or shop on Overstock. However, what distinguishes it from traditional currencies is the fact that there is no government behind the creation or circulation, which means that it derives its value from the number of users who buy it.