What Is a Cryptocurrency?
A cryptocurrency is a digital asset transferable directly between parties, with ownership recorded on a shared ledger and secured by cryptography rather than by an institution.
The distinctive property is that it is a bearer asset with no issuer. Whoever controls the private key controls the asset. There is no company behind it, no account to freeze, and no support line if you lose the key.
The problem it solves
Digital files copy perfectly, which makes digital cash hard: what stops someone spending the same coin twice?
The traditional answer is a trusted intermediary keeping the authoritative record. Bitcoin's contribution in 2009 was a way to maintain that record across a network with no trusted party, using consensus to agree on transaction ordering.
Whether that is worth the cost is a genuine argument. The engineering achievement is not in dispute.
What follows for a trader
Settlement is fast and final. Transfers settle in minutes and are irreversible, which removes settlement risk and removes any recourse for a mistake.
It trades continuously. No open, no close, no weekend. This changes risk management considerably: there is no overnight gap, and equally no pause during a crisis.
Custody is a real operational risk. Holding the asset means holding keys. Exchange failures have destroyed customer funds repeatedly, which is why "not your keys, not your coins" is a genuine risk-management statement rather than a slogan.
Fragmentation is extreme. The same asset trades on many venues with meaningfully different prices, and there is no consolidated tape. This creates arbitrage that would be competed away instantly in equities.
No issuer means no institution to intermediate, which removes counterparty risk in the asset and adds operational risk in custody. That trade is the defining feature.
The categories
They behave differently enough that grouping them is misleading.
Payment assets (Bitcoin, Litecoin) for transferring value.
Smart contract platforms (Ethereum, Solana) whose tokens pay for computation on the network.
Utility tokens granting access to a specific service.
Governance tokens conferring voting rights over a protocol.
Stablecoins (USDC, USDT) pegged to a fiat currency, and the plumbing of crypto trading, since most pairs quote against them.
Why prop firms trade it
High volatility, 24/7 markets, extreme fragmentation and an immature market structure add up to more exploitable inefficiency than mature asset classes offer. Several firms in this course's audience run substantial crypto desks for exactly that reason.
Treat crypto as a market-structure opportunity rather than a technology bet. The edge for a trading firm is in fragmentation, funding rates and basis, not in whether any given protocol succeeds.