People around the world use cryptocurrency to move money across borders in minutes, accept payments online and protect savings in high-inflation economies. Cryptocurrency transactions are projected to generate over $3.4 billion in revenue globally by 2030. But the benefits exist alongside significant risks, such as sharp price swings, scams and regulatory uncertainty.

Below, we'll go over crypto basics: how blockchains validate transactions, the types of crypto wallets people use and some common ways crypto is used today in payments and savings.

What's in this article?

• Crypto basics: What cryptocurrency is and how it's used
  
• How do blockchains validate transactions?
  
• What types of wallets allow you to use crypto?
  
• How is crypto used for payments and savings?
  
• What risks come with using crypto?
  
• How can beginners use cryptocurrency safely?
  
• How Stripe can help
  

Crypto basics: What cryptocurrency is and how it's used

Cryptocurrency is money that lives on the internet and relies on math rather than institutions to keep it secure. Each currency runs on a blockchain, a shared public ledger that no single group controls and that anyone can inspect. Around 28% of US adults owned cryptocurrencies in 2025.

With traditional money, your bank keeps a private record of your balance and updates it whenever you spend or get paid. With crypto, a network of computers collectively maintains the ledger, and every participant can see the same record of who owns what. When someone sends crypto, the network verifies the transaction and adds it to the ledger. That makes it extremely difficult for anyone to fake, edit, or reverse a transaction once it's recorded.

Crypto ownership hinges on a private key, which is a long, unique string of data that proves control over a specific address on the blockchain. If you hold the private key, you control the asset. If the key is lost, forgotten, or stolen, there's no way to restore it: no bank to call, no forgotten-password link. That degree of direct control is part of crypto's appeal, but it also raises the stakes for personal security.

Not all cryptocurrencies behave the same way. Some, such as Bitcoin, have a limited supply, which can appeal to people looking for scarce digital assets. Others, such as Ether, don't have a fixed maximum cap on supply. And stablecoins are designed to track the value of a traditional asset – often the US dollar – to minimise volatility while keeping the speed and accessibility of crypto.

How do blockchains validate transactions?

A blockchain is a running history of transactions, organised into blocks that are linked together in chronological order. When someone sends crypto, the network picks up the transaction, checks it and groups it with others into the next block.

Blockchains are powerful because they're immutable and collaborative. Independent participants check that the sender actually has the funds, the digital signatures are legitimate and the transaction follows the rules of that network. Once enough participants agree, the block gets locked into the chain. Each block includes a fingerprint of the one before it, which makes the history tamper-evident. If you change one detail, every connected fingerprint breaks.

Blockchain networks use different methods, called consensus mechanisms, to coordinate this agreement.

Here are the two major methods.

Proof of Work (PoW)

Participants known as miners compete to solve a computational puzzle. The first to solve it earns the right to add the next block and collect rewards. There is little economic incentive to mine "fake" blocks because it's nearly impossible for these blocks to be verified by the network. The PoW system thus discourages fraud, but mining consumes vast amounts of energy.

Proof of Stake (PoS)

Participants known as validators stake their own coins as a kind of security deposit. The network chooses validators to approve new blocks based on the amount they've staked. If a validator tries to cheat, the network can seize part of their stake. This model uses a fraction of the energy of PoW, but requires users to lock up sizable value to participate directly.

Both approaches make dishonest behaviour easy to detect. Once added, a block is effectively permanent. Rewriting history would require taking control of the majority of the network, an almost impossible task on large, established chains.

What types of wallets allow you to use crypto?

You need a wallet to use cryptocurrency: this is typically either software or hardware that manages the keys that prove you own your assets. A wallet stores the private key that unlocks your funds on the blockchain and lets you authorise transactions.

Crypto wallets come in a few formats, each offering a different balance of convenience and protection.

Hardware wallets

These are physical devices that store your keys offline. They sign transactions internally, so the keys never touch your computer or phone. This makes them one of the safest options for substantial amounts of crypto or for long-term storage.

Software wallets

Apps on your phone or computer store keys locally. They're easy to set up and ideal for everyday use, but because they run on internet-connected devices, they're more exposed to malware or phishing attempts.

In addition to choosing between hardware and software wallets, crypto users also have to decide between custodial and noncustodial wallets.

Custodial wallets

These wallets are accounts on exchanges or platforms where a third party holds the keys for you. This can feel as normal as an online bank account, but it comes with counterparty risk. If the provider is hacked or fails, you could lose access.

Noncustodial wallets

With a noncustodial wallet, you are the sole owner and manager of your private keys. This gives you greater control over your privacy and assets, but protecting your keys can present challenges. If you lose your keys, you lose access to your funds for good.

Custodial wallets offer more convenience and a familiar interface, especially for new crypto users. Noncustodial wallets offer more security, but require more steps to access funds.

How is crypto used for payments and savings?

Crypto is useful when money needs to move quickly or hold its value reliably.

Here are the clearest use cases for crypto:

• Cross-border payments: People use crypto – especially stablecoins – to send money across borders in minutes. Fees are often far lower than traditional remittance channels.

• Business payments and ecommerce: Some businesses accept crypto directly, while others rely on processors that convert it to local currency instantly.

• Global payouts to contractors: Companies use stablecoins to pay people in countries where banking access is limited or unreliable. Stripe, for example, enables stablecoin payouts that settle fast.

• Savings in high-inflation markets: People often use fiat-pegged stablecoins to hold onto purchasing power when the local currency is volatile and then convert back to local currency only when they need to spend.

• Long-term investment: Some people hold crypto such as Bitcoin or Ether in their broader investment strategy. Others participate in staking or lending to earn yield, though these options introduce more risk.

What risks come with using crypto?

Understanding crypto's potential issues up-front is the best way to avoid losing money or exposing your business to unnecessary risk.

Be mindful of the following:

• Price volatility: Crypto prices can swing dramatically in short periods, often driven by global sentiment or liquidity shifts. Bitcoin's value ranged from $20,000 in 2023 to $123,000 in mid-2025, for example. These moves make crypto useful for certain transactions but unpredictable as a store of value unless you're using stablecoins.
  
• Security breaches and fraud: While blockchains themselves are hard to compromise, the platforms and devices people use are not. Hacks, malware, phishing and compromised exchanges have led to big losses because crypto transactions can't be reversed once executed. The ecosystem also attracts bad actors running fake investment schemes, phishing campaigns, or convincing impersonations of support teams.
  
• Lack of consumer protections: Crypto doesn't come with the safety features people expect from banks: no chargebacks, no Federal Deposit Insurance Corp. (FDIC) insurance (in the US), and no guaranteed recovery path after fraud. If an exchange goes under or your wallet is compromised, you're largely dependent on your own safeguards.
  
• Regulatory uncertainty: Rules about crypto vary widely across countries and continue to change, which can affect tax treatment and disclosure requirements. Businesses and individuals must stay current on regulations in all territories in which they operate to avoid unintentional violations.
  
• Technical risk and user error: Bugs in smart contracts, poorly designed wallets, or simple mistakes (such as sending a token to the wrong address or losing a recovery phrase) can permanently lock or destroy access to your assets. Even small errors can have significant consequences because transactions are final.
  
• Marketing manipulation and liquidity gaps: Some assets, especially smaller ones, can be moved by large holders or thin markets. Sudden swings or illiquid conditions can trap users in positions where they can't exit efficiently.
  

How can beginners use cryptocurrency safely?

The following habits help beginners use crypto with more confidence and fewer mistakes.

Here's how to get started as safely as possible:

• Start small: Begin only with amounts you can afford to lose while you learn how wallets, addresses and fees work. Hands-on experience with small transactions is generally the best way to build your knowledge.

• Use reputable platforms: Stick to established services with strong security records and transparent practices. Avoid leaving large balances on exchanges longer than necessary.

• Secure your accounts and devices: Turn on two-factor authentication (2FA) everywhere, use strong, unique passwords and keep your devices updated. Protect your email account as part of your financial security perimeter.

• Protect your keys and recovery phrases: Your private key or seed phrase is the single point of access to your assets. Store it offline, never share it and avoid digital copies that can be hacked. If someone asks for it, it's a scam.

• Double-check every transaction: Confirm the address, network and asset type every time you send crypto. Send a small test to confirm everything is set up correctly before a larger transaction.

• Stay sceptical: Ignore unsolicited investment offers, "guaranteed returns," and anyone asking to manage your funds for you. Real support teams will never ask for your seed phrase or remote access to your device.

• Understand tax and legal obligations: Crypto transactions often trigger tax events or reporting requirements, and these vary by country. Keep basic records, and make sure you're compliant before scaling your activity.

How Stripe can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world. Businesses can accept stablecoin payments from almost anywhere in the world that settle as fiat in their Stripe balance.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, including stablecoins and crypto.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.

• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments or get started today.