Here you will find our extensive collection of cryptocurrency FAQs. If you can’t find the answer here, then you can submit your own question(s) and answer(s) at the bottom of this page. Or you can simply write a comment regarding any of our existing cryptocurrency FAQs.
In many cases, such as questions about taxation and regulation, the detailed answer is country or state-specific so we are unable to give you the full answer in one little faq, but we will try to point this out.
Other questions, such as those regarding cryptocurrency safety and security, often depend on how the cryptocurrency is being used.
Other answers depend on the exact cryptocurrency coin in question. For example, what may be true for bitcoin may not also be true for Ethereum.
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Security (1)
Despite the common misconception, currency is not stored in cryptocurrency wallets. Cryptocurrencies are stored in blockchain account ledgers.
Most ledgers are public (anyone can view them), but some are private. The ledgers are duplicated on 1000s of computer systems distributed around the world. This replication is done to ensure that the ledger stays truthful. Most of the computer systems that participate in hosting the ledgers are owned by cryptocurrency miners.
Unlike traditional fiat currency (like the US Dollar), cryptocurrencies have no physical manifestation (you can’t actually touch them). They only exist in electronic (or “virtual”) form.
Although they are not directly stored in wallets, you do need a wallet to use your currency. These wallets contain unique code numbers, called private keys. It is the private keys that only you and your wallet know that prove your ownership of your currency. The wallet with proper keys allows owners of the currency to transfer or spend their currency. They do this by sending “spend/send” messages to the globally distributed account ledger.
Via the mathematical miracle of private key cryptography no one can steal your funds without knowing your unique special private key.
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Usage (2)
Some predict that the next few years will see a significant increase in the acceptance and usage of cryptocurrency.
This may occur as large financial institutions begin to accept bitcoin. It will also see growth as more people begin to get involved in cryptocurrency ownership and usage. The number of cryptocurrency transactions has also been on the rise year to year. This indicates good growth with no end in sight. Even when cryptocurrency prices go on rollercoaster rides, the usage continues to grow. Though critics claim that Crypto will fail in the future, everything else indicates it is here to stay. I think its safe to say that the future looks bright for cryptocurrencies, but it may continue to be a rocky road for a few more years to come.
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Despite the common misconception, currency is not stored in cryptocurrency wallets. Cryptocurrencies are stored in blockchain account ledgers.
Most ledgers are public (anyone can view them), but some are private. The ledgers are duplicated on 1000s of computer systems distributed around the world. This replication is done to ensure that the ledger stays truthful. Most of the computer systems that participate in hosting the ledgers are owned by cryptocurrency miners.
Unlike traditional fiat currency (like the US Dollar), cryptocurrencies have no physical manifestation (you can’t actually touch them). They only exist in electronic (or “virtual”) form.
Although they are not directly stored in wallets, you do need a wallet to use your currency. These wallets contain unique code numbers, called private keys. It is the private keys that only you and your wallet know that prove your ownership of your currency. The wallet with proper keys allows owners of the currency to transfer or spend their currency. They do this by sending “spend/send” messages to the globally distributed account ledger.
Via the mathematical miracle of private key cryptography no one can steal your funds without knowing your unique special private key.
0
0
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Wallet (1)
Despite the common misconception, currency is not stored in cryptocurrency wallets. Cryptocurrencies are stored in blockchain account ledgers.
Most ledgers are public (anyone can view them), but some are private. The ledgers are duplicated on 1000s of computer systems distributed around the world. This replication is done to ensure that the ledger stays truthful. Most of the computer systems that participate in hosting the ledgers are owned by cryptocurrency miners.
Unlike traditional fiat currency (like the US Dollar), cryptocurrencies have no physical manifestation (you can’t actually touch them). They only exist in electronic (or “virtual”) form.
Although they are not directly stored in wallets, you do need a wallet to use your currency. These wallets contain unique code numbers, called private keys. It is the private keys that only you and your wallet know that prove your ownership of your currency. The wallet with proper keys allows owners of the currency to transfer or spend their currency. They do this by sending “spend/send” messages to the globally distributed account ledger.
Via the mathematical miracle of private key cryptography no one can steal your funds without knowing your unique special private key.
0
0
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