Cryptocurrency is a digital currency that uses cryptography and a decentralized system to record transactions. It has no central authority and relies on blockchain technology to maintain a consensus on transactions across a distributed network. Key features include using cryptography, a distributed network, and a consensus mechanism like proof-of-work. To be considered a cryptocurrency, it must also function as a usable currency and run on digital technologies like computing and networking hardware. Advantages include easy access, quick payments, fast settlements, privacy, and lack of third parties, while disadvantages include volatility, difficulty of use, and risk of permanent loss if private keys are lost.