What Is Cryptocurrency? Crypto Explained for Beginners

Ready to understand crypto without the jargon? You’re in the right place. This beginner-friendly guide explains what cryptocurrency is, why people use it, how blockchain works, and how you can start exploring crypto directly in the bunq app.

Disclaimer: This article is for educational purposes only and is not financial advice. bunq doesn’t give trading advice. Manage crypto at your own risk. Always do your own research or speak to a qualified financial advisor before making investment decisions. Cryptocurrency investments come with risks, including the potential loss of the money you invest. Prices can fluctuate significantly. bunq Crypto is managed through our partner Kraken.

What is cryptocurrency?

Cryptocurrency is a type of digital asset. Unlike coins or banknotes, it only exists digitally. You can buy, sell, send, or hold crypto using online platforms and apps.

The best-known cryptocurrency is Bitcoin, but there are many others, including Ethereum, Solana, XRP, Cardano, and stablecoins like USDT or USDC.

What makes crypto exciting is that it gives people a new way to explore digital money and investing. Traditional currencies like euros or dollars are issued and managed by governments and central banks. Many cryptocurrencies work differently. They run on blockchain technology, which is a shared digital record of transactions.

That means crypto can be transparent, global, and accessible to anyone with the right platform.

How does cryptocurrency work?

Think of crypto as digital money powered by a public record book.

When someone sends cryptocurrency, the transaction is checked by a network of computers. Once verified, it is added to a blockchain. A blockchain is a digital ledger that records transactions in blocks, then links those blocks together in order.

Here’s the simple version:

1. Someone sends crypto

2. The network checks the transaction

3. The transaction is added to the blockchain

4. The balance updates digitally

One of the biggest benefits of crypto is that it can move without the usual layers of traditional finance. Many people like crypto because it can feel more direct, more open, and easier to access from anywhere.

With bunq, you don’t need to manage separate platforms or extra wallets yourself. You can explore Crypto directly from the bunq app, powered by Kraken. 

What is blockchain?

Blockchain is the technology behind many cryptocurrencies.

It works like a shared digital ledger that stores information across many computers. Each group of transactions is stored in a “block”. Once a block is full, it is linked to the block before it, creating a chain.

That’s where the name comes from: blockchain.

The benefit is transparency. Instead of one company or institution controlling the record, the record is shared across a network. This helps make transactions easier to verify and harder to change once confirmed.

In simple terms: blockchain helps make crypto open, traceable, and built for the digital world.

What’s the difference between crypto and regular money?

Regular money, also called fiat money, includes currencies like the euro, pound, or dollar. It is issued by governments and managed by central banks.

Crypto works differently. Many cryptocurrencies are created by code and run on decentralised networks. Some, like Bitcoin, have a limited supply. Others, like stablecoins, are designed to track the value of traditional currencies such as the euro or US dollar.

Here’s a simple comparison:

Both regular money and crypto can have a place in your financial life. With bunq, you can manage your everyday money, savings, and crypto in one app.

Why do people use crypto?

People explore crypto for different reasons. Some are curious about new technology. Others see it as a way to diversify their investments. Some like the idea of digital assets that are accessible globally.

Here are a few reasons crypto has become popular:

It’s digital-first
Crypto is built for the online world. You can buy, sell, and track it from your phone.

It’s accessible
You don’t need to be a finance expert to start learning. With the right app, you can explore crypto in a simple, beginner-friendly way.

It’s transparent
Many crypto transactions are recorded on public blockchains, which makes them easy to verify.

It offers variety
From Bitcoin to Ethereum to stablecoins, there are different types of crypto with different uses.

It helps you learn about the future of money
Crypto is one of the most talked-about innovations in finance. Understanding it can help you feel more confident in a changing financial world.

What are the most popular cryptocurrencies?

Here are some of the most well-known cryptocurrencies beginners often come across:

Bitcoin
The first and most famous cryptocurrency. It is often described as “digital gold” because of its limited supply.

Ethereum
A blockchain that supports more than payments. It can power apps, smart contracts, and digital assets like NFTs.

Solana
Known for fast transactions and relatively low fees.

Stablecoins
Cryptocurrencies designed to track the value of traditional currencies like the euro or US dollar. Examples include USDT and USDC.

XRP
Designed to support fast payments, including cross-border transfers.

Cardano
A blockchain focused on scalability, sustainability, and research-driven development.

Is crypto safe?

Crypto is built on technology designed to make transactions transparent, traceable, and difficult to change once confirmed.

That’s one of the reasons people are interested in it. Blockchain technology can give users a clearer view of how transactions move and how digital assets are recorded.

Like any investment, crypto also comes with things to keep in mind. Prices can move up and down, and it’s important to use a trusted platform, understand what you’re buying, and only invest what feels right for you.

Is crypto legal?

In many countries, including across the EU, buying and holding crypto is legal. Crypto rules can vary depending on where you live and how you use it.

The good news is that crypto is becoming more established. In the EU, dedicated rules such as MiCA help create a clearer framework for crypto-assets and crypto service providers.

That makes crypto easier to understand, easier to access, and more familiar for beginners who want to explore it through trusted platforms.

Can you lose money with crypto?

Yes, crypto prices can go up and down. That’s part of how investing works.

The important thing is to start with the basics. Learn what crypto is, understand how different coins work, and choose a platform that makes it easy to track everything in one place.

A simple beginner approach is to start small, stay curious, and build your knowledge over time.

How do beginners start with crypto?

Beginners usually start by learning the basics before buying anything. Here’s a simple way to approach it:

1. Learn what crypto is and how blockchain works

2. Understand the risks

3. Choose a trusted platform

4. Start small

5. Track your crypto in one place

6. Avoid hype, scams, and pressure to buy quickly

You can explore Crypto directly in the bunq app, powered by Kraken. bunq launched Crypto with Kraken in April 2025, allowing users in selected European countries to trade more than 300 cryptocurrencies, including Bitcoin, Ethereum, and Solana.

How to buy crypto with bunq

You don’t need to be a crypto expert or manage multiple platforms. With bunq, you can explore crypto directly from your banking app.

Here’s how it works:

1. Open the bunq app
   Already a bunq user? Open the app. New to bunq? You can sign up in minutes.

2. Go to the Crypto tab
   This is your starting point for crypto in bunq.

3. Choose your crypto
   Pick from cryptocurrencies like Bitcoin, Ethereum, Solana, and more.

4. Enter an amount and confirm
   Decide how much you want to buy and confirm your order.

5. Track everything in one place
   Monitor your crypto alongside your savings and everyday accounts.

bunq Crypto is managed through Kraken, so you can explore crypto without switching between multiple apps or managing separate wallets yourself.

Ready to learn more about crypto?

Crypto can feel complex at first, but the basics are easier to understand once you know how digital assets and blockchain work.

With bunq, you can explore crypto directly from the app you already use for your everyday money. Simple, accessible, and all in one place.

Want to keep learning? Read more about crypto:

• Which cryptocurrencies should I know about?

• Is Crypto safe? Here’s what you should know

• How do I start investing in crypto?