Cryptocoin is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocoins are categorized as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
Bitcoin, created in 2009, was the first decentralized cryptocoin. Since then, there have been numerous other cryptocoins created. These are often referred to as altcoins, as a combination of bitcoin alternative.
Altcoins use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.
Bitcoin and other cryptocoins have been touted as alternatives to traditional fiat currencies. Proponents of cryptocoins have said that they provide a more efficient way to conduct transactions and are not subject to the same fees and charges that traditional fiat currencies are subject to.
Cryptocurrencies have also been said to be more secure than traditional fiat currencies because they are not subject to the same central authority that can print more money or confiscate funds.
Critics of cryptocoins have said that they are highly volatile and subject to pump and dump schemes. They have also said that the lack of regulation makes them ripe for fraud and manipulation.