How crypto works

Cryptocurrency markets connect networks, tokens, exchanges, wallets, and data providers.

What cryptocurrency is

A cryptocurrency is a digital asset recorded on a blockchain or similar distributed ledger. The ledger keeps a shared history of transactions, and the network uses rules to determine how transactions are validated and how new records are added.

Some networks use proof of work, where computing power secures the ledger. Others use proof of stake, where validators participate by locking network tokens under protocol rules. Each network can have different technical, governance, and operational characteristics.

Coins, tokens, and networks

The word coin often refers to the native asset of a blockchain network, such as the asset used to pay transaction fees. The word token often refers to an asset created on top of an existing network. In everyday market data, people often use these terms loosely, so it helps to review the asset and network context together.

How crypto trading works

Crypto assets are commonly traded on centralized exchanges, decentralized exchanges, and broker platforms. Prices are usually quoted in trading pairs, such as an asset against a government currency or against another crypto asset.

Unlike many stock exchanges, crypto markets often operate continuously. Because trading can occur at any time, price charts may include activity across nights, weekends, and holidays.

Wallets and custody

A wallet stores the keys or access method used to control a crypto asset on its network. Some people use custodial accounts, where a platform manages access on their behalf. Others use self-custody wallets, where they manage keys directly. Custody choices can affect access, recovery options, and operational risk.

Why crypto prices move

Crypto prices change as trades occur across venues. Historical movement can reflect supply and demand, liquidity, network activity, protocol updates, security events, exchange availability, regulatory developments, and broad market conditions.

A crypto price chart shows recorded market activity for a selected period. It should be treated as a record of past trading, not a prediction of future price movement.

Data differences to understand

• Venue differences can occur because each exchange has its own order book and liquidity.
• Continuous trading means daily open, high, low, and close values depend on the data provider's cutoff time.
• Stablecoins are designed to track another asset or unit, but their market prices can still vary.
• Network fees can change based on congestion and protocol rules.