Cryptocurrency explained: how digital money works without a bank

The information provided in this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high degree of risk. Always conduct your own research.A cryptocurrency is an entry in a public ledger that neither a bank nor a central bank controls on its own. This piece explains how that ledger works, what separates Bitcoin from the euro, and which rules apply in Germany to buying, custody and tax.A cryptocurrency is digital money whose balances sit in a public ledger that thousands of computers keep at the same time and constantly reconcile with one another. For a payment to count, nobody has to trust a bank: it is enough that the majority of those computers recognise the same order of entries. What you own is therefore neither a coin nor a file on your hard drive, but an entry in that ledger plus the cryptographic key that lets you pass it on. The market behind it has grown large. On October 22, 2026 CoinGecko listed 22,424 cryptocurrencies across 1,511 trading venues, worth around $2.78 trillion in total. Of that, 59.5 percent falls to Bitcoin alone and 10.7 percent to Ethereum. The remaining 22,400-odd entries share less th...