What is Cryptocurrency?

Cryptocurrency is a decentralised digital form of money designed to be used over the internet. Bitcoin, which launched in 2008, was the first cryptocurrency, and it remains by far the biggest, most influential, and best-known. In the decade since, Bitcoin and other cryptocurrencies like Ethereum have grown as digital alternatives to money issued by governments.

The most popular cryptocurrencies, by market capitalisation, are Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Other well-known cryptocurrencies include Tezos, EOS, and ZCash. Some are similar to Bitcoin while others are built on different technologies or designed to accomplish different goals.

What Is Bitcoin (BTC)?

Bitcoin is a decentralised cryptocurrency originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was launched in January 2009 as a peer-to-peer online currency — meaning all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them.

Bitcoin was created, according to Nakamoto's own words, to allow "online payments to be sent directly from one party to another without going through a financial institution." Some concepts for a similar type of decentralised electronic currency preceded BTC, but Bitcoin holds the distinction of being the first-ever cryptocurrency to come into actual use.

Who Created Bitcoin?

Bitcoin's original inventor is known under the pseudonym Satoshi Nakamoto. As of today, the true identity of the person — or organisation — behind the alias remains unknown. On October 31, 2008, Nakamoto published the Bitcoin whitepaper, describing in detail how a peer-to-peer online currency could be implemented using a decentralised ledger of transactions packaged in blocks and secured by cryptographic algorithms — the whole system later dubbed "blockchain."

Just two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network — the genesis block — launching the world's first cryptocurrency. Bitcoin was valued at $0 initially; the first known commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz traded 10,000 BTC for two pizzas — now known as Bitcoin Pizza Day. Nakamoto later handed control of the codebase to Gavin Andresen and stepped away permanently.

Where Can You Buy Bitcoin?

Bitcoin is, in many regards, almost synonymous with cryptocurrency — which means you can buy it on virtually every crypto exchange, both for fiat money and other cryptocurrencies. Some of the main markets where BTC trading is available include:

  • 1 Binance — largest exchange by trading volume globally
  • 2 Coinbase Pro — popular US-based regulated exchange
  • 3 Kraken — well-regarded for security and advanced features
  • 4 OKEx — broad asset support and global access
  • 5 Huobi Global — widely used across Asia and worldwide
  • 6 Bitfinex — advanced tools for experienced traders
  • 7 Coinmama — simple interface suited to beginners

What Is a Crypto Wallet?

Crypto wallets keep your private keys — the passwords that give you access to your cryptocurrencies — safe and accessible, allowing you to send and receive cryptocurrencies like Bitcoin and Ethereum. Unlike a regular wallet that holds physical cash, a crypto wallet technically doesn't store your crypto. Your holdings live on the blockchain but can only be accessed using a private key. Your keys prove ownership of your digital money and allow you to make transactions. Losing your private keys means losing access to your funds permanently.

How Do You Use a Crypto Wallet?

Crypto wallets range from simple-to-use apps to more complex hardware security solutions. Keys are stored in an app or other software — look for one protected by two-step encryption. This makes sending, receiving, and using your crypto as easy as using any online bank account. Wallets offered by a major exchange are the simplest way to get started and offer a balance of security and accessibility.

Using a software wallet like Exodus or Trust Wallet gives you direct access to your crypto holdings. Here's what you can do:

  • 1 Manage all your digital assets in one secure place
  • 2 Control your own private keys — no third-party dependence
  • 3 Send and receive cryptocurrency to and from anywhere in the world
  • 4 Interact with usernames rather than long hexadecimal public key addresses
  • 5 Browse dapps (decentralised finance apps) and DeFi protocols
  • 6 Shop at stores and merchants that accept cryptocurrency

What Is Cryptocurrency Trading?

Cryptocurrency trading is the act of speculating on cryptocurrency price movements via a CFD trading account, or buying and selling the underlying coins via an exchange. A Contract for Differences (CFD) is a financial contract that pays the difference in the settlement price between the open and closing trades, enabling investors to trade the direction of an asset over the short term without taking ownership of the underlying coins.

CFDs are derivatives and leveraged products, meaning you only need to put up a small deposit — called margin — to gain full exposure to the underlying market. Your profit or loss is still calculated based on the full position size, so leverage magnifies both profits and losses.

How Does Cryptocurrency Trading Work?

You can trade cryptocurrencies via a CFD account — derivative products that let you speculate on whether your chosen cryptocurrency will rise or fall in value. Prices are quoted in traditional currencies such as the US dollar, and you never take ownership of the cryptocurrency itself.

How Do Cryptocurrency Markets Work?

Cryptocurrency markets are decentralised, meaning they are not issued or backed by a central authority such as a government. Instead, they run across a distributed network of computers. However, cryptocurrencies can be bought and sold via exchanges and stored in wallets.

Unlike traditional currencies, cryptocurrencies exist only as a shared digital record of ownership stored on a blockchain. When a user sends cryptocurrency to another user, they send it to that user's digital wallet. The transaction isn't considered final until it has been verified and added to the blockchain through a process called mining — which is also how new cryptocurrency tokens are typically created.

Key takeaway: Crypto markets operate 24/7, 365 days a year. Unlike traditional stock exchanges that have set trading hours, cryptocurrency can be traded at any hour from anywhere in the world — giving investors unprecedented flexibility and access.

Investing with Fidelity Trading Hub

Fidelity Trading Hub is the world's leading AI-powered crypto investment platform. With a proven track record and unrivalled experience, we give investors the tools to make informed decisions in a burgeoning asset class. Our AI-Powered Trading System analyses the market faster and more accurately than a human ever could.

We have reinvented the global trading system to be more efficient, profitable, and intelligent — recording profit rates that completely disrupt the way cryptocurrency and forex trading is done. We've made it easier for investors who lack in-depth market knowledge to effortlessly earn from the $5.1 trillion moved daily across global markets.

With Fidelity Trading Hub you benefit from great leverage options, short-sell capabilities, fast deposits, and same-day withdrawals. Our support team is available 24/7/365 to assist you, with a monthly trading volume exceeding $11 billion USD.

Benefits of Investing in Cryptocurrency

Are you thinking about getting into crypto? It's not a bad idea. Currencies like Bitcoin and Ethereum have seen massive growth in recent years — a $1,000 investment a decade ago would have grown into millions today. Here are the key benefits of crypto investment:

1. Huge Opportunities for Growth

One of the biggest advantages of crypto investments is the growth potential. While most traditional assets offer moderate returns over time, crypto markets are capable of extraordinary gains. New currencies emerge regularly, and more established options like Bitcoin and Ethereum continue to grow at impressive rates.

2. Options to Trade Short and Long Term

Cryptocurrencies give you the flexibility to choose between short-term and long-term strategies. Long-term holdings are less affected by market dips, while short-term trading can generate faster returns. Fidelity Trading Hub's AI optimises across both strategies automatically.

3. Decentralisation — Free from Political Influence

The crypto market isn't tied to any financial institutions or political organisations. The power is in the hands of the user, so fiscal policy, government intervention, and traditional market recessions have limited impact on well-positioned crypto assets.

4. Short Processing Times

Blockchain technology makes all crypto transactions peer-to-peer. You don't have to wait days for bank clearance — most transactions are confirmed in seconds. At Fidelity Trading Hub, deposits and withdrawals are processed instantly.

5. Investing Made Easy with the Right Platform

If you're looking to invest in a fast-growing market, crypto is the perfect place to start. With Fidelity Trading Hub, you don't need to understand every nuance of the market — our AI handles the analysis, execution, and optimisation, while you watch your portfolio grow.

As this guide explains, investing in cryptocurrency comes with tremendous potential. Do your research, invest responsibly, and choose a platform you trust. With Fidelity Trading Hub, there are no limits to your earning potential.