Cryptocurrency is a digital payment system in which banks are not involved in verifying transactions. It is a peer-to-peer system that allows any user, anywhere, to send and receive payments. Cryptocurrency payments exist solely in digital form in an online database describing specific transactions. They do not involve transactions with physical money, which has the ability to circulate and exchange in the real world. When funds are transferred in cryptocurrency, the transactions are recorded in a public registry. Cryptocurrency is stored in digital wallets.
The term Cryptocurrency came into use because encryption (cryptography) is used to verify transactions: advanced encryption is used to store and transmit cryptocurrency data between wallets and to public registries. The purpose of encryption is to ensure reliability and security.