A cryptocurrency (
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve
As of September 2017, over a thousand cryptocurrency specifications exist; most are similar to
Most cryptocurrencies are designed to gradually decrease
In 1998, Wei Dai published a description of "b-money", an anonymous, distributed electronic cash system.  Shortly thereafter, Nick
The first decentralized cryptocurrency, bitcoin, was created in 2009
Central bank representatives have stated that the adoption of cryptocurrencies such as bitcoin
The Dogecoin Foundation, a charitable organization centered around Dogecoin and co-founded by Dogecoin co-creator Jackson Palmer, donated more than $30,000 worth of Dogecoin to help fund the Jamaican bobsled
The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed their use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. China Central
On March 25, 2014, the United States Internal Revenue Service (IRS) ruled that bitcoin will be treated as property for tax purposes as opposed to currency. This means bitcoin will be subject
Legal issues not dealing with governments have also arisen for cryptocurrencies.
The legal concern of an unregulated global economy
As the popularity of and demand for online currencies has increased since the inception of bitcoin in 2009,   so have concerns that such an unregulated person to person global economy that cryptocurrencies offer may become a threat to society. Concerns abound that altcoins may become tools for anonymous web criminals.
Cryptocurrency networks display a marked lack of regulation that attracts many users who seek decentralized exchange and use of currency;
Transactions that occur through the use and exchange of these altcoins are independent
Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions.
On August 6, 2013, Magistrate Judge Amos Mazzant of the Eastern District of Texas federal court ruled that because cryptocurrency (expressly bitcoin) can be used as money (it can be used to purchase goods and services, pay for individual living expenses, and exchanged for conventional currencies), it is a currency or form of money. This ruling allowed
GBL, a Chinese bitcoin trading platform, suddenly shut down on October 26, 2013. Subscribers, unable to log in, lost up to $5 million worth of bitcoin. 
In February 2014, cryptocurrency made national headlines due to the world's largest bitcoin exchange, Mt.
On March 31, 2015, two now-former agents from the Drug Enforcement
On December 1, 2015, the owner of the now-defunct GAW Miners website was accused of securities fraud following his development of the cryptocurrency known as Paycoin. He is accused of masterminding an elaborate
On August 24, 2016, a federal judge in Florida certified a class action lawsuit  against defunct cryptocurrency exchange Cryptsy and Cryptsy's owner. He is accused of misappropriating millions of dollars of user deposits, destroying evidence, and is believed to have fled to China. 
On November 21, 2017, an online company (Tether) which backs bitcoin cryptocurrency with fiat currency claims they were hacked, losing $31 million in USTD from their primary wallet.  The company has 'tagged' the stolen currency, hoping to 'lock' them in the hacker's wallet (making them unspendable). Tether indicates that it is building a new core for its primary wallet in response to the attack in order to prevent the stolen coins from being used.
Cryptocurrency is also used in controversial settings in the form
Darknet markets present growing challenges in regard to legality. Bitcoins and other forms of cryptocurrency used in dark markets are not clearly or legally classified in almost all parts of the world. In the U.S., bitcoins are
Since most darknet markets run through
Fundings - ICOs
An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture. An ICO is used by startups to bypass rigorous and regulated capital-raising processes required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, often Bitcoin or Ethereum. 
Cryptocurrencies use various timestamping schemes to avoid the need for a trusted third party to timestamp transactions added to the blockchain ledger.
The first timestamping scheme invented was
Modifications of the proof-of-work algorithm have been created to address the problem of scaling, such as the way the IOTA ledger works. IOTA uses a simplified Proof-of-work algorithm making use
Proof-of-stake and combined schemes
Some cryptocurrencies use a
Cryptocurrencies are used primarily outside existing banking and governmental
Competition in cryptocurrency markets
As of September 2017, there were over 1100  digital currencies in existence.
In order to follow the development of the market of cryptocurrencies, indices keep track of notable cryptocurrencies and their cumulative market value.
Crypto index CRIX
The cryptocurrency index CRIX is a conceptual measurement jointly developed by statisticians at Humboldt University of
CCI30 Crypto Currencies Index
The CCI30 index is composed of the 30
In September 2015, the establishment of the
- Cryptocurrencies have been compared
to pyramid schemes and economic bubbles ,such as housingmarket bubbles . Howard Marks of Oaktree Capital Management stated in 2017 that digital currencies were "nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it", and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999). 
- Community refers to
premining, hidden launches, or extreme rewards for the altcoin founders as a deceptive practice,  but it can also be used as an inherent part of a digital cryptocurrency's design, as in the case of Ripple. Pre-mining means currencyis generated by the currency's founders prior to mining code being released to the public. 
- Many banks do not offer services for cryptocurrencies and can refuse to offer services to virtual-currency companies. 
- Cryptocurrency can be permanently lost from local storage due
to malware ordata loss. This can also happen through the destruction of the physical media, effectively removing lost cryptocurrencies forever from their markets. 
- There are many perceived criteria that cryptocurrencies must reach before they can become mainstream. For example, the number of merchants accepting cryptocurrencies is
low,but increasing. 
- With technological advancement in cryptocurrencies such as bitcoin, the cost of entry for miners requiring
specialized hardware and software ishigh. 
- Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. One of the features cryptocurrency lacks in comparison to credit cards is consumer protection against fraud, such
as chargebacks .
- While cryptocurrencies are digital currencies that are managed through advanced encryption techniques, many governments have taken a cautious approach toward them, fearing their lack of central control and the effects they could have on financial security. 
- An enormous amount of energy goes into Proof of Work cryptocurrency mining, but it is important to compare it to the consumption of the legacy financial system.  Some cryptocurrencies such as
Ripple requireno mining, and many others use proof-of-stake algorithms, which require far less energy.
- Traditional financial products have strong consumer protections. However, if bitcoins are lost or stolen, there is no intermediary
withthe power to limit consumer losses. 
- Regulators in several countries have warned against their use and some have taken concrete regulatory measures to dissuade users. 
- The success of some cryptocurrencies has
caused multi-level marketing schemesto arise with pseudo cryptocurrencies, such as OneCoin .
- In October 2017, BlackRock CEO Larry Fink called bitcoin an 'index of money laundering'.  "Bitcoin just shows you how much demand for money laundering there is in the world," he said.