Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike traditional currencies issued by governments (like the dollar or euro), cryptocurrencies operate on decentralized networks based on blockchain technology. 

A blockchain is a distributed ledger enforced by a network of computers, known as nodes. Each transaction is recorded in a block, and these blocks are linked together in a chain. This structure ensures that the transactions are secure and transparent, and it prevents tampering or double-spending.

Some well-known examples of cryptocurrencies include Bitcoin, which was the first and remains the most famous, as well as Ethereum, which is known for its smart contract capabilities. Cryptocurrencies can be used for a variety of purposes, including online purchases, investment, and as a means of transferring assets across borders without intermediaries like banks.

Because of their decentralized nature, cryptocurrencies can offer increased privacy and potentially lower transaction fees compared to traditional financial systems. However, they also come with risks such as price volatility and regulatory uncertainty.