Ok so a cryptocurrency also referred to as a digital currency or a virtual currency is a form of digital money. A cryptocurrency allows the owner to buy goods and services in exactly the same way as physical cash does, however it’s not physical. It only exists as data and cannot be held in your hand. They allow the owner to pay for goods and services electronically over the internet.
Think of the concept this way – many years ago, goods and services were paid for in gold. This slowly moved on to physical money, notes and coins, whose value was back by the government of that country. Now with cryptocurrencies we have taken this progression further with an internet-based medium of exchange.