Cryptocurrencies are an alternative way of making payments to cash or credit cards. The technology behind it allows the ‘money’ to be sent directly to others without it having to pass through the banking system. For that reason they are outside the control of governments and are unregulated by financial watchdogs – and transactions can be made in a way that keeps you reasonably pseudonymous.

If you own a crypto-asset you control a secret digital key that you can use to prove to anyone on the network that a certain amount of that asset is yours. If you spend it, you tell the entire network that you have transferred ownership of it, and use the same key to prove that you are telling the truth. Over time, the history of all those transactions becomes a lasting record of who owns what: that record is called the blockchain.

Bitcoin was one of the first and biggest cryptocurrencies and has been on a wild ride since its creation in 2009, surging in value as investors piled in, drawing comparisons with the tulipmania of the 17th century before it crashed. Sceptics warn that the lack of central control make crypto-assets ideal for criminals and terrorists.

The number of crypto-assets has grown rapidly, including from several major companies. JP Morgan has built its own cryptocurrencies, while trading in traditional financial assets that track the value of cryptocurrencies – such as derivatives and contracts for difference – has also become available. Facebook is planning to launch its own digital currency – Libra – in 2020.

Richard Partington and Martin Belam