What is a cryptocurrency and how does it work?

Cryptocurrencies are digital assets that rely on an encrypted network to execute, verify, and record transactions, independent of a centralized authority such as a government or bank. Cryptocurrency was developed as an alternative to the dollar, and its functions can make it an attractive investment.

What is the difference between cryptocurrency and traditional currency?

Because cryptocurrency exists only online, there are important differences between cryptocurrency and traditional currency, like U.S. dollars. Cryptocurrency accounts are not backed by a government. Cryptocurrency held in accounts is not insured by a government like U.S. dollars deposited into an FDIC insured bank account.

What is a cryptocurrency wallet?

A cryptocurrency wallet is a means of storing the public and private "keys" (address) or seed which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency.

How secure is cryptocurrency?

It’s secure because all transactions are vetted by a technology called a blockchain. A cryptocurrency blockchain is similar to a bank’s balance sheet or ledger. Each currency has its own blockchain, which is an ongoing, constantly re-verified record of every single transaction ever made using that currency.