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Digital currency, also known as cryptocurrency, has recently taken the world by storm. Cryptocurrencies are traded on unregulated, electronic markets. They"re not backed by a central bank. While there may be some questions about their value as a currency, cryptocurrencies have become popular, rising in value over time. Cryptocurrency is an encrypted decentralized digital currency transferred between peers and confirmed in a public ledger via a process known as mining. Below, we take a simplified look at how cryptocurrencies like Bitcoin work.

Cryptocurrencies commonly-used today include the original Bitcoin, Litecoin, Namecoin, Novacoin, Peercoin, Ethereum and over 800 others. The most popular digital currencies are designed to reduce or eliminate that need. A cryptocurrency is an encrypted data string that denotes a unit of currency and only exists online. It requires other people to verify that the data string is valid through their own processing power. Both the currency data itself and the verification process are run through a decentralized network of computers across the world. A cryptocurrency is a digital currency that uses cryptography for security so that it is extremely difficult to counterfeit. It is an encrypted string of data that denotes a unit of currency. Unlike fiat currencies backed by central banks, cryptocurrency is decentralized. There are multiple systems used to verify cryptographically secured transactions in a peer-to-peer environment. These include proof-of-work or proof-of-stake