A cryptocurrency is a digital currency that was not created by a central authority, e.g., a central bank, but using a mathematical algorithm. The first digital cryptocurrency introduced in 2009 was Bitcoin, which is now considered to be the reserve currency among cryptocurrencies.
The basic technical prerequisite for the creation of cryptocurrencies was the development of blockchain technology by Satoshi Nakamoto. This is where a mathematical algorithm generates computing units that are passed directly between two parties (peer-to-peer) from computer to computer. The transfer is published as a transaction in a network in chronological order in blocks and confirmed by the network. Double payments are not possible, as the transaction can only be carried out by confirming its validity. Once a payment has been made it is non-reversible.
This network structure is called a blockchain. The payment transactions are stored within the blockchain architecture in a seamless and forgery-proof manner that can be viewed by everyone on the participating network.