Cryptocurrency is a digital currency that uses cryptography for security. In order to generate the currency, various cryptic mathematical equations are solved on a computer. Cryptocurrency is not controlled by any government or bank and has no physical form making it difficult to trace transactions and who owns the currency.
There are many different types of cryptocurrency including Bitcoin, Litecoin, Etherium and Zcash. The most popular type of cryptocurrency today is Bitcoin which was created in 2009 with an algorithm called SHA-256 that makes it hard for hackers to break into your account without knowing your password because they need both pieces of information (a public key) to hack into your account.
The way it works is by having two people, called “buyers” and “sellers,” agree to trade one type of cryptocurrency for another type of cryptocurrency with each other. This process happens without either party knowing who the other person actually is because they’re trading through what’s known as an electronic ‘wallet.’ This wallet could be on their phone or computer but doesn’t need to be connected directly to the internet in order for them to use it securely.