What crypto is (and what it isn't)
Free preview lesson
A cryptocurrency is a digital asset whose ownership is recorded on a shared, public ledger called a blockchain. Instead of a bank keeping the official record, thousands of independent computers keep copies of the same ledger and agree on which transactions are valid.
For U.S. tax purposes the IRS treats digital assets as property, not currency. That one fact shapes a lot of what you will learn later about taxes.
What crypto is not
- It is not a bank deposit. Crypto held on an exchange is generally not FDIC-insured, and crypto that isn't a security is generally not covered by SIPC either.
- It is not a guaranteed store of value. Prices can rise or fall sharply, and some tokens have gone to zero.
- It is not anonymous. Most blockchains are public, so transactions can often be traced.
Educational content only. Nothing in this course is a recommendation to buy or sell any crypto asset.
Why people use it
People use crypto to send value across the internet without a bank in the middle, to hold an asset outside the traditional system, to use blockchain-based apps, or to speculate on price. Each of those uses has its own risks, which this course covers module by module.