Crypto (either cryptocurrency or cryptovaults) is a kind of digital currency, which is often used as an alternative money system for the regular currencies.
Crypto is based on cryptography (encryption systems) and is accompanied by a proof of work schedule, which is used to generate the money, to check it for authenticity and to trade with it. In fact, crypto currency consists of a piece of encrypted code in which the transactions are stored. Every time a transaction takes place, the code is supplemented or changed with a new encrypted block of code. Because there are people who do transactions, the code gets longer and longer or every transaction changes. By praising rewards in the form of value, when someone with a special mining program has cracked a piece of code, new money value is ‘mined’. The value is also linked to money, because the cryptographic encryption of the coin makes it difficult to decipher it, and so it takes a certain amount of time for someone to find the key. This requires the use of computers, and computer owners who manage to decipher a piece of code are paid a certain amount of cryptographic money instead.
There are already many products and services for sale that can be paid for with cryptocoins. From a cup of coffee to online purchases of all kinds of goods. Cryptogeld does not have a central bank, is not regulated by a government, or has a central ear. Cryptogeld can be used to pay anyone in the world, directly from wallet to wallet, without the intervention of customs, tax, import duties or whatever.
What, then, is a bitcoin? A bitcoin is a form of cryptogeld. One of the many coins there are nowadays but the largest in terms of total power on the market. You often read about bitcoins because this is the most popular but this is also a cryptomunt.
With cryptogeld (bitcoins for example) you can make electronic payments:
Via the Internet
From person to person
For very low transaction costs
Just as easy as sending an email
Without the intervention of a bank or agency
To put it simply: bitcoins are digital money and you can use them just like you would with euros or dollars. You can use them to buy goods, exchange them for each other, receive them in exchange for a service, speculate on them or exchange them for euros, for example. And those are just a few of the almost innumerable applications.
Bitcoin is the first digital currency to be set up entirely decentrally, which means that no banks or other bodies are involved in exchanging bitcoins. The bitcoin network consists entirely of other users who, just like you, use bitcoins. This decentralized set-up, combined with strong encryption, makes bitcoin a secure and free currency.
(Almost) no transaction costs
If you pay with bitcoins there is no intermediary, the transaction costs are minimal or non-existent if you want to. There are no long waiting times until your money is transferred and Bitcoins are also (as good as) infinitely divisible, so you can transfer 1-bitcoin or 1-thousandth bitcoin.