Finance
How does cryptocurrency work?
Cryptocurrency works as digital money secured by cryptography and recorded on a shared ledger called a blockchain. Instead of a bank, a network of computers verifies and stores every transaction, making records hard to fake or change.
See it in motion.
Watch a 2-minute animated lesson that shows exactly how cryptocurrency works.
Step by step
- 1It's digital money secured by cryptography.
- 2Transactions are recorded on a shared blockchain ledger.
- 3A network of computers verifies transactions, not a bank.
- 4Records are extremely hard to alter or counterfeit.
Frequently asked questions
- How does cryptocurrency work?
- Transactions are verified by a network and recorded on a blockchain, a shared ledger secured by cryptography.
- Why is cryptocurrency secure?
- Cryptography and the distributed ledger make it extremely hard to fake transactions or change records.
- Do you need a bank to use cryptocurrency?
- No — transactions are verified by a decentralized network rather than a central bank.