How Does Cryptocurrency Work?
Cryptocurrency runs on decentralized computer networks instead of a central bank. Transactions are verified using secure technology and then added to a shared digital record. Some networks rely on computers solving complex problems, while others validate transactions based on how much crypto participants commit to the network. Once approved, transactions are permanent and cannot be changed.

What Is a Blockchain?
A blockchain is a public, digital record of transactions shared across a network of computers. Each transaction is grouped into a “block” and securely linked to the one before it, forming a chain. Because every participant has a copy, no single person or organization can alter the records, making blockchain secure and transparent.

How Blockchain Security Works
Blockchain uses advanced cryptography to protect information. Data is locked using encryption so only authorized users with the correct digital keys can access it. This prevents tampering, fraud, and unauthorized changes while keeping transaction details secure.

The Role of Cryptography
Cryptography keeps crypto networks secure and trustworthy. Each user has a public key, which others can see, and a private key, which must be kept secret. Together, these keys confirm ownership and authorize transactions, ensuring funds can only be moved by their rightful owner.

Why Blockchain Is Considered Transformational
Blockchain has the potential to make payments, contracts, and transfers faster and more efficient by reducing the need for middlemen. Supporters believe it could simplify global payments, improve record-keeping, and streamline processes like real estate transactions.

Bitcoin vs. Ethereum
Bitcoin and Ethereum are both built on blockchain technology, but they serve different purposes. Bitcoin was created as digital money and a store of value. Ethereum was designed as a platform that allows developers to build applications and automated agreements called smart contracts.

Key Differences at a Glance

  • Bitcoin: Digital currency with a limited supply
  • Ethereum: Platform for apps, contracts, and innovation
  • Validation: Bitcoin relies on proof-of-work, while Ethereum uses proof-of-stake
  • Speed: Ethereum processes transactions faster than Bitcoin

What Are Proof-of-Work and Proof-of-Stake?
These are methods used to confirm transactions.

  • Proof-of-Work: Computers compete to solve puzzles, which helps secure the network but uses more energy.
  • Proof-of-Stake: Participants lock up crypto to help validate transactions, using far less energy.

What Is Bitcoin Halving?
Every few years, the reward for creating new Bitcoins is reduced by half. This limits how quickly new Bitcoin enters circulation and helps maintain scarcity. Over time, no more than 21 million Bitcoins will ever exist.

Why Are There So Many Cryptocurrencies?
Anyone can create a cryptocurrency, and many are designed for specific uses like payments, gaming, or finance. However, not all coins are legitimate. Some are experimental, while others are created solely to take advantage of hype. Financial institutions typically limit offerings to more established options.

What Is a Stablecoin?
A stablecoin is designed to keep a steady value, often tied to the U.S. dollar or another asset. These coins aim to reduce price swings and are commonly used for payments or transferring value.

What Is a Digital Wallet?
A digital wallet stores your cryptocurrency and allows you to send and receive it.

  • Hot wallets are connected to the internet and easy to use.
  • Cold wallets stay offline and offer added security.

What Is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where people buy, sell, and trade digital assets. It works similarly to a stock exchange but focuses on crypto instead of traditional investments.

What Is a Decentralized Exchange?
A decentralized exchange allows users to trade directly with one another without a central authority. This can improve security and user control, but it also comes with fewer protections and regulations.

Important Reminder
Cryptocurrency can offer opportunity, but it also carries risk. Prices can change quickly, and losses are possible. Always do your research and invest carefully.

Who Is Eligible to Trade?
Only account holders over the age of 18 and in good standing with the financial institution can buy, sell, or hold assets. Trust Account Holders and Commercial Accounts are not supported. Account holders residing in TX, ID, or NY are unable to trade.