What is Cryptocurrency?

Cryptocurrency is a digital form of currency secured through cryptographic proof. Viewed as digital assets, cryptocurrency does not require third parties to authorize transactions (such as financial institutions), which means it is a decentralized form of currency.

How Does Cryptocurrency Work?

Cryptocurrency uses cryptography in its transactions, meaning all transactions are encrypted and are highly secure. These peer-to-peer transactions are added to a distributed ledger and approved by participants in the cryptocurrency network, then added to a blockchain.

What is Cryptocurrency Used for?

Similar to fiat money such as the U.S. dollar, cryptocurrency can be used to buy and sell goods and services, as well as to transfer currency to others.  Cryptocurrency can be sent directly from peer-to-peer and can also be handled by cryptocurrency exchanges.

How is Blockchain Used in Cryptocurrency?

Cryptocurrency uses blockchain technology to host and process transactions. After crypto transactions are approved, they are added to a blockchain and are transparent for all to see. By using cryptographic proof, blockchains are extremely secure and cannot be edited.

To learn more about the relationship between cryptocurrencies and blockchains, watch the “What is Cryptocurrency Technology?” Blockchain Basics video.

What are the Different Types of Cryptocurrency?

There are thousands of cryptocurrencies. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Dogecoin. 

To learn more about Dogecoin, visit the “What is Dogecoin?” Blockchain Basics video.