Overview of cryptocurrencies

This chapter provides an introduction and overview of cryptocurrencies in order to lay the contextual foundation for the book, prior to considering their regulation. Taking an evolutionary perspective to the advent of cryptocurrencies, this chapter describes the history and development of cryptocurrencies, starting with the emergence of alternative currency, blockchain, and distributed ledger technology. The chapter then highlights the complexity of cryptocurrencies by describing the multiplayer ecosystem in which they operate, including miners, developers, and the various cryptocurrency financial intermediaries. This is followed by a description of the issues of regulatory concern raised by cryptocurrencies, in order to gain an understanding of the motivation and rationale for their regulation. The chapter then concludes by discussing the key insights from this consideration of what cryptocurrencies are, how they operate, and why they need to be regulated.