In the era of digital technology that is currently on the rise, the question of the concept of cryptocurrency seems to be no longer unfamiliar or difficult for everyone. Although it first appeared in the 1990s, it wasn’t until the 21st century that cryptocurrency proved its worth. This has become a craze among financial investors due to the benefits and profit potential that cryptocurrency offers. So, what is cryptocurrency, and how are its advantages and disadvantages expressed? Let’s explore this in more detail with FTV!
What is cryptocurrency?
What is the concept of cryptocurrency?
Cryptocurrency is known as a type of currency created from digital bits, also referred to as digital money. This type of cryptocurrency is exclusively used in an internet environment to pay for investment costs. During transactions, participants must ensure the presence of factors such as an internet connection, a computer network, and the electronic means of the issuing organization.
Cryptocurrency does not exist as a physical entity but always exists invisibly through electronic environments. They are stored on the internet, phones, information, and other electronic payment mediums.
This means that users cannot physically hold their own money.
In addition, cryptocurrency can be understood as a payment method through secure signatures, also known as digital currency. Like paper money, cryptocurrency is a tool commonly used for transactions and value accumulation. Furthermore, cryptocurrency can be converted into paper money at the request of the owner.
The history of the formation of cryptocurrency today
Cryptocurrency began to emerge in the 1990s, when the information and digitalization era was just starting to explode. Inspired by the commercialization process, some entrepreneurs and organizations founded cryptocurrencies such as Flooz, Beenz, and Digicash… These businesses seemed to focus solely on and depend on third-party transaction control systems. This is one of the reasons that led to the collapse of many different companies.
After many decades, cryptocurrency has officially formed its own empire. The most notable example is Bitcoin, which appeared in 2008. By utilizing blockchain technology, transactions do not rely on a third-party intermediary and have a very high level of security. This is the reason why cryptocurrency is growing stronger and is the ideal choice for many investors.
The Birth of Money: From Barter to Basic Currency
Before money, people relied on the barter system. Goods and services were exchanged directly—grain for meat, tools for clothes—but this method was inefficient. It required both parties to want what the other offered, known as the “double coincidence of wants.” To solve this issue, early societies began to search for a common medium of exchange. And so began the earliest form of currency. But still, we ask: what is money in its simplest form?
Ancient communities used commodities like salt, cattle, or seashells as money. These items were valued both for their usefulness and scarcity. This commodity money had real, intrinsic value. Over time, societies refined the concept of money further to make trade easier, more standardized, and more scalable.
Coins and the First Formal Currencies
Around 600 BCE, the first standardized metal coins were minted in Lydia (modern-day Turkey). Made from gold and silver, these coins were stamped with images to verify their authenticity and value. This innovation allowed people to carry wealth conveniently and perform transactions more reliably.
As trade routes expanded and economies grew more complex, the need for even more efficient methods of value exchange emerged. Enter: paper money. First introduced in China during the Tang Dynasty and popularized in the Song Dynasty, paper currency eventually spread around the world. This marked another major step in answering the question: what is money in a world becoming more connected?
From Gold Standard to Fiat Money
For centuries, many nations used the gold standard—currency was backed by a fixed quantity of gold. This helped limit inflation and built public trust. However, it also restricted governments’ flexibility during economic crises.
In the 20th century, most countries gradually abandoned the gold standard. The U.S. fully left it in 1971, ushering in the age of fiat currency. Fiat money has no intrinsic value; its worth is based on government backing and public confidence. So now, what is money if it’s not backed by gold or tangible assets? It becomes a matter of trust, policy, and law.
The Digitalization of Money
The late 20th and early 21st centuries saw the rise of electronic banking, credit cards, and online payments. Consumers began using money without ever touching cash. PayPal, debit cards, mobile banking apps—these services made digital money an everyday experience.
This digital shift prepared society for the next major transformation: cryptocurrency. As transactions moved online, people began questioning centralized control and security. Once again, the timeless query returned: what is money, and must it always be governed by banks or states?
The 2008 Financial Crisis: A Catalyst for Change
The global financial crisis of 2008 exposed deep flaws in traditional financial systems. Banks collapsed, governments bailed out corporations, and people lost faith in institutions. In response to this instability, a person (or group) using the pseudonym Satoshi Nakamoto released the Bitcoin whitepaper.
Bitcoin introduced a decentralized, peer-to-peer system for transferring value—without banks, governments, or middlemen. It was a direct response to the question: what is money when central authorities fail to protect the public?
The Rise of Cryptocurrency
Bitcoin officially launched in 2009. Unlike fiat currencies, it wasn’t printed—it was mined through computational effort. Transactions were recorded on a blockchain, a decentralized ledger spread across thousands of nodes globally.
This model offered:
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Transparency: Every transaction was verifiable.
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Security: Protected by cryptographic algorithms.
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Scarcity: Limited supply (21 million BTC).
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Autonomy: No need for centralized control.
So now, in this new era of finance, what is money if it’s nothing more than data secured by math and consensus?
Ethereum and the Expansion of Blockchain
While Bitcoin pioneered digital currency, Ethereum brought a new layer of functionality. Launched in 2015, Ethereum allowed developers to create smart contracts—self-executing contracts based on blockchain. This opened the door for decentralized finance (DeFi), non-fungible tokens (NFTs), and countless other blockchain applications.
These innovations challenged traditional systems and invited people to reconsider old definitions. What is money if it can also execute legal agreements, hold digital art, or enable community voting?
Central Bank Digital Currencies (CBDCs)
Governments took notice. In recent years, many countries have begun experimenting with Central Bank Digital Currencies (CBDCs). Unlike cryptocurrencies, these are state-issued but fully digital currencies. China’s digital yuan and the European Central Bank’s digital euro are examples.
CBDCs aim to modernize payments and maintain control in a digital economy. Yet, their emergence deepens the philosophical and economic debate: what is money when it blurs the line between government control and blockchain-based freedom?
Challenges and Criticism
Despite the potential, cryptocurrency faces several challenges:
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Volatility: Prices can swing wildly.
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Security risks: Exchanges and wallets can be hacked.
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Regulatory uncertainty: Laws differ from country to country.
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Energy consumption: Especially in proof-of-work systems like Bitcoin.
Still, the crypto community continues to innovate—moving toward greener alternatives like proof of stake, and building more user-friendly platforms. And as the technology evolves, so does the question: what is money in a world driven by code and global connectivity?
Conclusion: A Changing Definition of Money
From bartering goods in ancient times to scanning a QR code for payment today, money has constantly evolved. It reflects human needs, trust, and technological advancement.
Cryptocurrency represents the latest transformation—a tool that could redefine global economics. Whether centralized or decentralized, digital or physical, one truth remains: money is what society agrees it to be.
And so we circle back to the original question, not yet fully answered:
What is money — and what will it become next?
Trust and the Changing Nature of Money
One of the most overlooked but vital components of any currency is trust. Without it, even the most well-designed financial system cannot function. Whether it’s a coin, a paper bill, or a string of code on the blockchain, its value is ultimately based on collective belief. This brings us back to the timeless question: what is money?
If people no longer trust a nation’s economy or leadership, their currency can quickly lose value—even collapse. We’ve seen this happen in countries suffering from hyperinflation, where paper money becomes nearly worthless. In contrast, decentralized digital currencies like Bitcoin aim to build trust not through governments, but through transparency, algorithms, and community consensus.
However, this form of trust is still relatively new. It’s no longer about backing by gold or state authority—it’s about network security, immutability, and user adoption. These are revolutionary ideas that are pushing us to rethink: what is money, and what gives it real value?
A New Generation, A New Kind of Currency
Digital natives—those who grew up with smartphones, social media, and online games—are redefining their relationship with money. For them, cash is rarely used. Online banking, QR codes, and cryptocurrencies feel more natural than paper bills or coins. This generation views digital assets not only as investments, but sometimes even as identity or culture.
They are comfortable storing money in apps, trading virtual tokens, and using cryptocurrencies to support causes or communities. This cultural shift forces economists and policymakers to ask once again: what is money to a generation that may never set foot in a traditional bank?
The meaning of money is evolving—faster than ever before. And as technology changes how we save, spend, and invest, the answer to what is money will keep changing, too. The meaning of money is evolving—faster than ever before. And as technology changes how we save, spend, earn, and invest, the answer to what is money will keep changing, growing, and expanding to fit the digital world around us.
