Lesson 5 - Digital and Crypto Basics
Money used to be metal coins and paper bills. Today, most of it is just numbers in a bank’s database. Digital money and crypto might sound complicated, but they’re just new ways to move value around.
What digital money is
Digital money is regular currency stored as numbers on bank computers. Your salary lands in your bank account, you pay by card or phone, and no cash ever appears. It’s still the same national currency - just in digital form. Banks, payment apps, and cards all run on this digital money system.
This chart shows how most of the world’s money exists as digital bank balances, while only a small part is physical cash.
What crypto is
Cryptocurrencies are private digital currencies built on blockchain technology. They aren’t issued by banks or governments. Instead, computer networks track ownership and confirm transactions. Popular examples are Bitcoin and Ethereum. They are fast, borderless, and run 24/7 - but they can also be volatile and risky.
Mini story: First crypto experience
Ava, a 20-year-old student, bought her first Bitcoin in 2021 after seeing people talk about it on social media. She used a crypto exchange app, created an account, and bought €50 worth. Within a month its value went up to €80, and she was excited. But then it dropped to €30 the next week. That shock taught her that crypto prices can swing wildly. She decided to keep only a small part of her savings in crypto and the rest in a regular savings account. Her experiment showed her the key point: crypto can offer big gains, but also big losses, so it’s not something to rely on for everyday money.
Digital vs. crypto money at a glance
Summary
- Digital money is normal currency stored and moved electronically
- Crypto is private, blockchain-based, and more volatile
- Digital money is stable for daily use - crypto is more like a high-risk asset
Key Terms
Further Learning
Track Progress
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