How do cryptocurrencies differ from other currencies?
Cryptocurrencies are digital currencies that don't rely on central banks or authorities to control their supply. There are thousands of different cryptocurrencies that all exist online. Bitcoin was the first cryptocurrency and is used to store and transfer value, but now there are many cryptocurrencies that operate in different ways for different purposes.
Most cryptocurrencies use blockchains to continuously verify their supply. Blockchains are distributed, secure public ledgers that record every transaction. Blockchains allow all cryptocurrency users to trace the origins of their money and verify its authenticity.
Why do some people consider cryptocurrencies to be superior to fiat currencies?
Cryptocurrencies are considered by many to be an improvement over traditional fiat money, like the US dollar, Japanese Yen, or Chinese Yuan because cryptocurrencies are divisible down to tiny fractions, decentralized, and easy to transfer. Cryptocurrencies have gained a great deal of respect and recognition from the general public since Bitcoin launched in 2009. With widespread adoption and education of cryptocurrencies, it's entirely possible that they may become the preferred form of currency by the majority of people.
Cryptocurrencies can also be made to be either anonymous or pseudonymous, meaning that even though there is often a public ledger which notes every transaction, it is hard to identify the individuals behind transactions that get sent over the internet. This aspect of cryptocurrencies gives users confidentiality and privacy that other currencies cannot.
At their core, cryptocurrencies represent next-generation private money which cannot be controlled by anyone, even powerful governments.