A cryptocurrency is a digital currency which is an alternative form of payment created using encryption algorithms.

Cryptocurrency comes under many names. You have probably read about some of the most popular types of cryptocurrencies such as Bitcoin, Lite coin, and Ethereum. Cryptocurrencies are increasingly popular alternatives for online payments. 
The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system. To use cryptocurrencies  you need a cryptocurrency wallet. 
These wallets can be software that is a cloud based service or is stored on your computer or on your mobile device. The wallets are the tool through which you store your encryption keys that confirm your identity and link to your cryptocurrency.
Cryptocurrencies are still relatively new  and the market for these digital currencies is very volatile. Since cryptocurrencies don't need banks or any other third party to regulate them. 
They tend to be uninsured and are hard to convert into a form of tangible currency. Since you store your cryptocurrencies in a digital wallet, if you lose your wallet (or access to it or to wallet backups)  you have lost your entire cryptocurrency investment.