According to Jan Lansky, a cryptocurrency is a system that meets six conditions: The system keeps an overview of cryptocurrency units and their ownership. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
Ownership of cryptocurrency units can be proved exclusively cryptographically. The system allows transactions to be performed in which ownership of the cryptographic units is changed.
A transaction statement can only be issued by an entity proving the current ownership of these units. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.
In Marchthe word “cryptocurrency” was added to the Merriam-Webster Dictionary. Stephanie Yang of The Wall Street Journal defined altcoins as “alternative digital currencies,”  while Paul Vigna, also of The Wall Street Journal, described altcoins as alternative versions of bitcoin.
In centralized banking and economic systems such as the Federal Reserve Systemcorporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers.
In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it.
The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.
Blockchain The validity of each cryptocurrency’s coins is provided by a blockchain. A blockchain is a continuously growing list of recordscalled blocks, which are linked and secured using cryptography. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.
The block time is the average time it takes for the network to generate one extra block in the blockchain. This is practically when the money transaction takes place, so a shorter block time means faster transactions.
Proof-of-work schemes The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA and scrypt.