The virtual currencies that have gotten the most attention are cryptocurrencies, which are used to transact business directly between two parties without going through a banking system.
Using a cryptocurrency is very different from paying with traditional currency. It’s a process with its own unique digital features, a distinctive underlying technology, and a highly specialized vocabulary.
To understand how cryptocurrency works, let’s look at a situation where it may be used.
Let’s assume you are selling a mountain bike to your cousin, using Bitcoin for the transaction. Each of you would each have a digital wallet that contains your private key—an alpha-numeric code of at least 16 characters (punctuation marks are encouraged!) that is far more comprehensive than a PIN. The private key, which should be kept entirely secure, enables you spend the Bitcoins allocated to your account.
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